The cities of Iran are in darkness. For two hours at a time, from the Gulf to the Caspian, the country believed to have the world's third largest oil reserves doesn't have the electricity to power homes, traffic lights, hospitals and the rest of civic life. There are reports of deaths in hospitals in Tehran's swankiest neighbourhoods, the traffic in Isfahan, Shiraz and the capital grinds to a halt as traffic signals cease and in smaller towns there are angry demonstrations.

The energy ministry's decision to publish "blackout timetables" hasn't helped things and the official statistics – a 32,000 mW grid can't satisfy 34,000 mW needs – don't wash. The lights are out in Bandar Abbas on Iran's southern coast, in Sistan-Baluchestan towards Afghanistan and Mazandaran towards Turkmenistan. A deputy energy minister, Professor Mohammad Ahmadian has been replaced but resignations over the issue are less to do with competence than President Ahmadinejad juggling positions in his favour, ahead of next year's presidential elections.

Perhaps Ahmadian paid the price of raising the spectre of a five-fold increase in electricity prices. The free marketeers in the government who see a bright future in membership of the World Trade Organisation call for the government subsidy for domestic electricity to be slashed.

The middle classes who quietly bear the irritation of two-hour queues to fill up their cars at petrol stations occasionally rise up. At much-publicised recitals of Persian music in Tehran, the lights went out just as renowned world music star, Homayoun Shajarian, got on stage. After thousands of people clapped in the darkness, singing the "old" pre-revolution national anthem (even women's voices could be heard and women are not allowed to sing in public), the star's more famous father, Mohammad Reza Shajarian got on stage and denounced the government. He said the interior ministry was deliberately trying to stop Iranians from listening to the music of their country. Visibly angry, the audience's mood was less anticipation of complex, jazz-like permutations of Dastgahs on Dafs, Tars, Tombaks, Setars, Kamanchehs, Neys, Tanburs, Santurs, and Uds and more on political change.

It was the same at the concert of Iranian Kurd Shahram Nazeri, incongruously held at one of the Shah's old palaces and where the VIPs were police. The lights didn't go out but there was chaos after the traffic lights of Tehran, sophisticated ones that tell drivers how long they have to wait before they change, all dimmed.

It was bad enough in the cold winter when power cuts plagued 11 provinces and the National Iranian Gas Company warned Iranians to moderate their consumption or face further cuts.

Ironically, the more environmentally-sound sources of energy - hydroelectric plants - are causing some of the worst power cuts. The reasons for the power cuts are endemic bad planning by a corrupt elite as well as members of that elite siphoning off oil for export. Those profits end up overseas with the trickle-down in Iran reaching North Tehran BMW-dealerships and bootleggers.

Without electricity, the economy continues to self-destruct. In the scorching heat, offices cannot operate without air-conditioners and the little manufacturing done in Iran is threatened with even more disasters. Making deals with China necessitated the opening up of the Iranian market to cheap Chinese goods so at this rate the little of it done at home will be destroyed.

Official inflation is near 30% and only the continued subsidy for food allows many to live. Iran may look richer than every other avowedly Muslim country on earth but it is teetering on the brink. The only chink of light for the millionaire Mullahs is in what President Vladimir Putin said, that South Ossetia so brutally bombed by Georgians backed by Washington and Tel Aviv, 500 miles north of Tehran, is a prelude to a U.S. attack on Iran to rig the U.S. presidential elections. Nothing will unify Iranians behind their government like a foreign attack, regardless of the hangings and worsening kleptocracy.