The National Iranian Oil Refining and Distribution Company has no plans to import gasoline unless the current unsustainable consumption pattern changes for the worse, said the director of coordination and production supervision at the state-run firm.
“Daily gasoline consumption in Iran has exceeded 96 million liters and it is projected to surpass 110 ml/d in 2023, in which case import will become inevitable,” Saeed Maddah-Moravvej was also quoted as saying by ISNA.
Gasoline use amounted to 76 ml/d in 2020, which then soared to 86 ml/d in 2021 and now it is close to 96 ml/d, he added.
“Inventories are full at present and NIORDC has no worries in meeting demand in the current fiscal year. Nonetheless, imports are very likely next year, as the current production capacity at 102 ml/d will not change next year.”
Of the total daily production (102 ml/d), 52% are produced by the Persian Gulf Star Refinery and the rest by Shazand Refinery in Arak, Markazi Province, Tabriz Refinery in East Azarbaijan Province and Bandar Abbas and Lavan refineries in Hormozgan Province, he added.
According to the official, as long as domestically-manufactured cars do not comply with international standards, consumption patterns are very unlikely to change.
Iranian cars are notorious for their poor mileage, as their consumption is three times higher than most vehicles produced all over the globe.
Furthermore, the expansion of public transportation can help postpone the import scheme.
“All refineries are up and running, and petroleum byproducts are being transferred to fuel depots in major cities,” he added.
The official reassured that gasoline inventories are full and the fuel has been transferred from refineries both via pipelines and tanker trucks.
Global Average
Per capita gasoline consumption in Iran, with a population of 83 million, is above the global average.
Based on data from the Oil Ministry and the National Iranian Oil Company, daily consumption of gasoline in Iran is 10 times more than Turkey with almost the same population.
Drawing a parallel between Iran and more populated countries like China, the NIOC data revealed that close to 450 million liters of gasoline are burnt daily in China that has a population of over 1.5 billion, meaning gasoline consumption in Iran is three times greater than that of China.
NIORDC, a subsidiary of NIOC, started to export the fuel to international markets, namely Iraq, Afghanistan, the Persian Gulf littoral states and the semi-autonomous region of Iraqi Kurdistan in 2019.
Nonetheless, experts have warned that if the consumption growth rate continues at the same pace, the company will have to stop selling gasoline and must import it to meet the ever-growing demand in less than two years.
The more fuel is burnt domestically, the less can be sold and not only will the NIOC lose its market share, but also deprive Iran of a part of its foreign revenues.
Each liter of gasoline is sold at 3.5 cents in Iran, whereas the same amount of fuel can generate 95 cents if it is exported.
In other words, if local consumption is reduced by 10 million liters per day, the company can earn close to $3.5 billion in revenues per year.
Guinness World Record
Gasoline consumption between 2011 and 2017 shot up by 50% that was big enough to be registered in the Guinness World Record, Alireza Sadeqabadi, NIORDC's former CEO, said.
"Such prohibitive consumption is simply not proportional to the number of cars in the country and is worthy of concern," he added.
NIOC produces around 100 million liters of diesel per day, of which 60 million liters are in compliance with Euro-5 standard.
Maddah-Moravvej noted that around 20,000 tons of liquefied petroleum gas are produced in Iran per day, half of which is sold in regions that still do not have access to piped gas, namely in southern provinces like Sistan-Baluchestan and Kerman.
“Although one million cars are equipped with LPG kits, the Oil Ministry does not intend to add LPG to the country’s car fuel basket,” he said.
“As long as cars can run on compressed natural gas, LPG should be used for more useful purposes like petrochemical feedstock to be converted to more value-added products.”
Iran has some of the world’s largest natural gas resources and grids in the world. Nevertheless, substituting CNG with LPG in the energy mix does not make economic sense.
