Iran is constructing seven refineries in an effort to boost its crude and gas refining capacity by more than 1.5 million barrels per day (bpd), a senior oil official was quoted as saying on Saturday.

'The construction of seven refineries has started with the investment of 15 billion euros ($23.22 billion),' Mehr news agency quoted Aminollah Eskandari, a director of the National Iranian Oil Refining and Distribution Company (NIORDC) as saying.

'About 1.56 million barrels will be added to the country's capacity to refine crude oil and gas derivatives,' he added.

Iran is the world's fourth-largest oil producer but lacks sufficient refining capacity and imports large amounts of gasoline which it then sells at a heavily subsidised price.

Tehran, in 2006 started on a multi-billion dollar, five-year programme to expand and upgrade its domestic refining capacity to 3.3 million bpd from the current 1.65 million bpd.

Eskandari said all seven refineries would be on stream by 2012. Iranian officials say gasoline imports have declined sharply since rationing was launched last year.

Importing gasoline is a sensitive issue when Iran is facing Western pressure over its disputed nuclear programme.

But analysts have already dismissed Iran's plan to bolster its refining capacity, saying rising costs and lack of state funding for these projects will likely see the target date completion be pushed back.-Reuters