The US House of Representatives has overwhelmingly approved sanctions legislation aimed at forcing Iran to freeze its nuclear programme by depriving the Islamic republic of gasoline.
REUTERS - The U.S. House of Representatives approved legislation on Tuesday to impose sanctions on foreign companies that help supply gasoline to Iran, a move lawmakers hope will deter Tehran from pursuing its nuclear program.
The bill authorizes President Barack Obama to levy sanctions on energy companies that directly provide gasoline to Iran along with the firms that provide the insurance and tankers to facilitate the fuel shipments. The Senate must approve the measure before it would be enacted.
The legislation would expand an existing U.S. law that already seeks to punish foreign companies that invest more than $20 million a year in Iran's energy sector.
"This bill has one overriding goal: To prevent Iran from achieving a nuclear weapons capability," said Representative Howard Berman, co-sponsor of the legislation.
"We must use all the tools at our disposal, from diplomacy to sanctions, to stop Iran's march toward nuclear capability," said House Speaker Nancy Pelosi. "By targeting Iran's ongoing dependence from largely imported refined petroleum we reduce the chance that Iran will acquire the capacity to produce nuclear weapons."
The legislation was cleared by the House in 412-to-12 vote.
The sanctions include preventing violating companies from getting financial assistance from U.S. institutions, like the U.S. Export-Import Bank.
Many lawmakers hope cutting off Iran's gasoline supplies will put pressure on Tehran to give up its nuclear program. While Iran has some of the world's biggest oil reserves, it must import 40 percent of its gasoline to meet domestic demand because of a lack of refining capacity.
As the United States has stepped up pressure on companies doing business with Iran, a number of past suppliers like BP and Indian refiner Reliance have backed away from providing fuel, but imports have largely been maintained as companies like European trading firms Trafigura and Vitol, Kuwait based International Petroleum Group and Malaysia's Petronas step into the breach, traders said.
There is concern the legislation could backfire on the United States if Iranian citizens blame America for supply shortages and higher gasoline prices that would likely result.
"There is nobody in the Iranian government....that's not going to get their gasoline," said Representative Earl Blumenauer. "It's going to be impactful on the people of Iran."
Representative Dennis Kucinich said the bill "amounts to economic warfare against the Iranian people."
"This will unify the Iranian people against us," said Representative Ron Paul.
Some energy experts have said fuel sanctions on Iran would cause higher gasoline prices, but not stop supplies because the country has porous borders and a history of smuggling petroleum products
Date created : 2009-12-16