* Petrol consumption falls by a sixth overnight
* Price rises fourfold with removal of subsidies
* Heavy police presence ensures calm
(Adds details)
By Hashem Kalantari
TEHRAN, Dec 20 (Reuters) - Iranian gasoline useage fell by a sixth on the first day after the government of President Mahmoud Ahmadinejad implemented a deeply unpopular four-fold price rise, the oil ministry website said on Monday.
The price rise is part of Ahmadinejad's policy to bolster Iran's sanctions-hit economy by phasing out subsidies on a range of essentials such as energy, food and water.
People rioted when the government started rationing subsidised petrol in 2007, but a heavy police presence at gas stations and a general feeling of resignation meant no trouble was reported on Sunday.
Until the price hike, subsidies had allowed Iranians -- who see cheap fuel in the oil-rich country as a birthright -- to pay just 1,000 rials (about 10 U.S. cents) per litre for the first 60 litres they buy per month. Beyond that they paid 4,000 rials per litre.
The price hike pushed the 60-litre ration price up to 4,000 rials and the higher price to 7,000 rials.
Consumption on Sunday was down 16.6 percent, according to the ministry website.
"On Saturday, 63.9 million litres of gasoline was consumed in the country but it dropped by 10.6 million litres on Sunday to 53.3 million litres simultaneous with the enforcement of the targeted-subsidy law," it quoted the state National Iranian Refining and Distribution Co. as saying.
The website said consumption of premium gasoline dropped by 800,000 litres to 2.4 million litres on Sunday, a fall of 25 percent.
SANCTIONS SQUEEZE
As well as saving state cash, the subsidy cut is aimed at curbing excessive consumption of valuable resources in Iran, whose economy has been hit by United Nations, European Union and U.S. sanctions in a dispute over its nuclear programme.
Iran rejects Western suspicions that the programme is a cover for building an atomic bomb, saying it is solely for generating electricity.
Reduced gasoline demand would relieve pressure on Iran's refineries as it struggles to produce all its own gasoline and avoid having to import 30-40 percent of its consumption, as was the case before sanctions targeted the trade.
Officials announced in September that an emergency plan to refine gasoline in petrochemicals plants now meant Iran no longer needed to import the fuel. But Iranians fear the home-made fuel is of lower quality and has contributed to a big increase in pollution, something the government denies. [ID:nLDE6B70M9]
Ahmadinejad has told the nation that the subsidy cuts will reduce waste, save the state money and reduce the unfairness whereby richer people, who spend more, benefit more from subsidised prices than the poor.
But some politicians have warned that any leap in overall inflation due to the subsidy reform could be disastrous, and some motorists said they would no longer be able to afford to drive.
Officials have said they will prosecute hoarders or people trying to profiteer from the price rises, and Ahmadinejad has called on Iranians to show "solidarity".
(Editing by Mark Trevelyan)
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