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Iran seeks import cuts in response to sanctions

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TEHRAN, Iran — Iran's Central Bank governor is calling for a cut in imports to boost domestic production as the country grapples with tougher international sanctions over its nuclear program.

Four rounds of U.N. Security Council sanctions and separate penalties imposed by the United States and its European allies have hit Iran's economy as the country battles inflation and unemployment but have failed to persuade the country to halt a key part of its nuclear program.

Central Bank Governor Mahmoud Bahmani said the nation should limit imports to "necessary goods" to help lift domestic production and reduce the amount of hard currency exiting the country, the state-run daily newspaper Iran reported Tuesday.

"Imports should be reduced," Bahmani was quoted as saying. "In other words, we should not allow the import of every sort of product."

The international pressure has failed to deter Iran, and Foreign Ministry spokesman Ramin Mehmanparast said Tuesday the country would continue enriching uranium, the part of Iran's nuclear program that is of central concern to the West.

Enrichment at low levels is used to make fuel for nuclear power plants, but at higher levels it can be used in warheads — giving Iran a possible pathway to nuclear weapons development. Tehran denies U.S. accusations that it is concealing such an aim under the cover of a civilian program and says it only wants to enrich uranium to fuel power plants and a medical research reactor.

With Russian help, Iran began loading fuel into its first nuclear power plant in the southern city of Bushehr on Aug. 21 after years of delays.

Mehmanparast, the ministry spokesman, said the notion that Iran no longer needs to enrich uranium after loading the Bushehr plant with fuel provided by Russia was off base.

"When nuclear facilities start working in a country, and are to be expanded, there is definitely a need for (more) enrichment," he said, adding that Iran wants to raise nuclear power generation to 20,000 megawatts — 20 times Bushehr's capacity.

The uranium fuel Russia has supplied for Bushehr is well below the more than 90 percent level of enrichment needed for a nuclear warhead. Iran is already producing its own uranium enriched to the Bushehr level — about 3.5 percent. It also has started a pilot program of enriching uranium to 20 percent, which officials say is needed for a medical research reactor in Tehran.

Iran has announced plans to build other nuclear power plants and says designs for a second facility in southwestern Iran are taking shape.

Iranian officials argue that sanctions are counterproductive, depriving Western firms of access to the country's market while simultaneously boosting Tehran's self-sufficiency. Iran has a well developed automotive and airline sector, and local companies have increasingly stepped in to fill the void created by Western nations that have shied away from work in the country's vital oil sector.

But analysts note that the sanctions have pressured the country by limiting foreign investment and restricting its ability, for example, to tap into the kind of funds needed to revamp its dilapidated oil sector. The country's annual import bill, overall, tops $50 billion.

Iran, which sits atop the world's fourth largest proven reserves of conventional crude, imports over a third of its fuel because of insufficient refining capacity. Nuclear power is seen by Iranian officials as a key way of meeting the country's growing power needs.

Iran's state TV reported that the country formally began production Tuesday at an undersea oil field in the Strait of Hormuz.

The report quotes Mahmoud Zirakchian, head of Iran's offshore oil company, as saying the Hengam oil field is producing about 7,000 barrels of crude per day. The field is jointly held by the Gulf nation of Oman and has a reserve of 600 million barrels of light crude.

Iran produces 4.2 million barrels of oil per day, making it the second largest oil producer in OPEC.