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TEHRAN - Iran is prepared to deal with any sanctions on its gasoline imports that world powers might impose over the country's disputed nuclear activities, a senior oil official was quoted as saying on Wednesday.

Iran's hardline rulers have repeatedly shrugged off the impact of sanctions imposed on the country over its expanding nuclear work, which the West fears is a cover to build bombs. Tehran denies the charge, saying its nuclear programme is peaceful.

Managing director of National Iranian Oil Products Distribution Company Farid Ameri said Iran had stockpiled enough gasoline, and also its refineries could produce enough motor fuel for domestic use in case of any sanctions.

"Iran's gasoline reserves have increased one billion litres since the start of the current Iranian year (which started on March 2009)," said Ameri, state television reported.

Iranian media reported in January that Iran had raised its stockpile of gasoline to 2.4 billion litres.

Iran, the world's fifth-largest oil exporter, imports 40 percent of its gasoline to meet domestic demand because it lacks refining capacity.

This makes the Islamic state vulnerable to any punitive measures by the West that targets trade. Iran has been slow in attracting foreign investment to develop its energy sector because of political instability and sanctions.

Iran has been trying to boost gasoline production by using petrochemical refineries. Iran said in November that petrochemical facilities could be used to produce about 14 million litres of gasoline per day, raising total output to 58.5 million litres.

"Our refineries are capable of producing enough gasoline to meet the domestic demand," said Ameri.

The United States and its European allies want United Nations sanctions for a wider gasoline import ban on Iran. Israel, which Tehran refuses to recognise, called on Monday for an immediate embargo on Iran's energy sector.

Western diplomats believe that China, along with fellow veto-wielder Russia, would block any U.N. sanctions targeting Iran's energy sector. Chinese state companies are selling gasoline to Iran.

Some energy experts have said fuel sanctions on Iran would raise prices but not stop supplies because the country has porous borders.