U.S. Congress seen hindering cheap fuel for Iran

By Tom Doggett

WASHINGTON (Reuters) - Legislation to punish Tehran for its nuclear program by denying U.S. financial assistance to foreign companies that provide gasoline to Iran has a good chance of passing Congress.

Iran may find willing new suppliers if the move succeeds. But it would be costly for its government, which heavily subsidizes gasoline. Sanctions would be even more costly for Iran's citizens, who would bear the added expense.

Under the legislation, which overwhelmingly cleared the House of Representatives last week, the U.S. Export-Import Bank would be barred from providing credit, insurance or loan repayment guarantees to companies that supply fuel to Iran or help expand the country's domestic refining capacity.

The U.S. Senate still has to take up the measure.

"I think there are pretty good chances that it will pass," said James Phillips, Middle East expert at The Heritage Foundation. "I don't think there's going to be a lot of trepidation for taking action against the (Iranian) regime."

Andrew Grotto, senior national security analyst at the Centre for American Progress, said the measure had better than a 50-50 chance of making into law.

Iran has some of the world's richest oil reserves, but it imports 40 percent of its gasoline to meet growing demand. Government subsidies help keep gasoline in Iran much cheaper than in other countries.

The U.S. move aims to pressure Iran to refrain from development of nuclear weapons. Iran insists its nuclear technology is for generating electricity.