RENEE MONTAGNE, host:

Police in Tehran are guarding gas stations today after Iranians went on a rampage. Angry over the government's decision to ration gasoline starting yesterday, they torched several gas stations and smashed shop windows. Imposing a system of fuel rationing has only made President Mahmoud Ahmadinejad more unpopular. Tehran's Financial Times correspondent is Najmeh Bozorgmehr, and she joins us now. Good morning.

Ms. NAJMEH BOZORGMEHR (Correspondent, Financial Times): Good morning.

MONTAGNE: Now, Iran is one of the world's largest producers of oil. So why ration gasoline?

Ms. BOZORGMEHR: Gasoline is supplied to the people at a very cheap rate, which is 11 cents per liter. This has led to huge consumption, which is 75 million liters per day. The government does not have enough refineries inside Iran to meet this demand, so they import most of this consumption. It cost this government $5 billion last year only for imports. And this year, if this is going to continue, probably the government has to spend $7 billion or so.

And that has become also Iran's vulnerability in the international crisis it's facing over the nuclear program. As we know, some people have mentioned that it is a possibility to put Iran under pressure to cut import of petrol to Iran. So the government both from economic point of view and national security point of view decided to go for rationing so that people can be more disciplined in spending and, on the other hand, the government can start building refineries so Iran can be self-sufficient in petrol.

MONTAGNE: Although President Ahmadinejad ran and was elected on promises of improving the economy, and between the rationing and then gasoline prices have also risen, how serious is this discontent for his government?

Ms. BOZORGMEHR: Well, certainly, it will have negative impact on his popularity. I'm not saying he has lost his popularity. His anti-corruption rhetoric is still welcomed by people, but this is the paradox he's facing: If you want to run this economy, you cannot expand subsidies as he wanted to do and as he promised to do. But on the other hand, that's what people expect and that's what he promised people, and he's basically breaking promises.

MONTAGNE: What is the situation there today? Have things settled down?

Ms. BOZORGMEHR: Yes, sure. It was only the first hours and basically the first night. And the situation is quite calm, although people keep complaining because, as you also said, Iran is the second biggest oil producer in the world and people also say that it's our birthright to have cheap energy. So people have not digested this decision yet, and I don't think easily they will happy with this decision.

MONTAGNE: Thank you very much for joining us.

Ms. BOZORGMEHR: Thank you.

MONTAGNE: Najmeh Bozorgmehr is a correspondent for the Financial Times in Tehran.

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