Demand for CNG hybrid cars and prices of such vehicles have soared since the Iranian government decided to triple gasoline prices overnight on Nov. 15, a business insider says.
Alireza Pourhassani, a member of Tehran Auto Dealers Association, told Tasnim News Agency that in the past two weeks, CNG hybrid vehicles' prices have gone up by 70 to 100 million rials ($570-813) depending on the model.
As per the new regulations, private car owners can buy 60 liters of subsidized gasoline every month with a fuel card for 15,000 rials (12.1 cents) per liter, up 50%. Additional purchases (maximum 250 liters a month) will cost 30,000 rials (24.3 cents) per liter—up 200%.
"Prior to the fuel rationing, car prices were on a mild upward trajectory, which was mostly caused by the domestic carmakers' falling output. However, after the gasoline price tripled, several vehicle models, including CNG hybrids, saw a price jump," the official said.
Pourhassani noted that the auto market volatility will not ease until manufacturers manage to increase their production.
According to the official price updates on Monday, the cheapest vehicle in Iran’s auto market, SAIPA’s Pride 131 is sold for 500 million rials ($4,065).
SAIPA’s Tiba now costs 590 million rials ($4,800) and the popular Peugeot 405 manufactured by Iran Khodro (IKCO) is selling for 950 million rials ($7,723).
IKCO's Samand EF7 and Dena plus are sold at 1.12 billion and 1.62 billion rials ($9,100 and $13,170) respectively.
Officials in Denial
Concerns raised over the auto market chaos compelled senior officials to intervene.
Industries Minister Reza Rahmani said, "After the fuel rationing, the government has strongly prohibited domestic car manufacturers from increasing car retail prices, so the market volatility is certainly caused by other factors.”
Rahmani blamed the auto market chaos on the internet and said the “opportunist middlemen, as usual, are manipulating the market”.
Abbas Tabesh, the deputy industries minister, echoed Rahmani's words and said the domestic market is unstable and prices have increased for some products.
"But not every change in the market is related to the gasoline story," he added.
Tabesh claims that autumn and winter are peak seasons for buying cars, so vehicle prices were expected to increase, regardless of fuel rationing.
In addition, vehicles are changing from consumer goods to capital products—that is customers intend to bring added value to their purchased vehicles.
Demand for CNG Hybrids
Following the government's decision to hike fuel prices, compressed natural gas consumption has risen by 2 million cubic meters a day since Nov. 15, the head of CNG Department at the state-run National Iranian Oil Products Distribution Company said.
“CNG consumption is growing rapidly and has surpassed 21 mcm/d, up 11%,” Hassan Qolipour added. “The figure is expected to exceed 24 mcm/d by the end of December.”
Since mid-November, close to 30,000 car owners have filled applications to convert their vehicles to CNG hybrids at authorized centers.
“Due to the large number of applicants, the authorized centers [supervised by NIOPDC and the Industries Ministry] will follow the policy of first come, first served,” Ali Mahmoudian, the head of Alternative Fuels Union, said.
“Much-needed parts and equipment to convert cars to CNG hybrids have been indigenized and centers will be working round the clock to meet rising demand.”
Depending on the type of car and size of the CNG tank, owners will be charged between $300-400. There are close to 250 active conversion centers in the country and could rise to 380 on demand.
According to NIOPDC, of the 19 million vehicles in Iran, over 5 million have hybrid CNG engines.
