Converting 213,000 gasoline-powered public transportation and commercial vehicles into compressed natural gas hybrids has helped save 370 million liters of gasoline over the last two years, the head of the National Iranian Oil Products Distribution Company, a subsidiary of the National Iranian Oil Company, said.
“If NIOPDC wanted to import the massive amount of fuel, it would have cost $126 million,” Ali Akbar Nejad-Ali was also quoted as saying by ISNA.
The state-run firm has invested close to $100 million on the scheme so far, he added, noting that around 330 conversion centers in 25 provinces are equipped with domestically-made kits and tanks.
The official noted that the initiative is part of a nationwide scheme launched by NIOPDC to curb gasoline use by 16 million liters per month over two years.
The scheme’s long-term goal is to convert 1.46 million gasoline-powered vehicles into CNG hybrids that will help curb gasoline use by 23 million liters per day and add the same amount to the CNG consumption rate.
According to Nejad-Ali, to sign up for conversion, cab and pickup owners are required to register at Gcr.niopdc.ir, where their personal ID and vehicle information are checked for eligibility.
“The plan was expected to wind up in 24 months, but Covid-19 pandemic has delayed the plan,” he said.
“CNG consumption is growing and has exceeded 24 million cubic meters per day. The figure is expected to rise by a further 90% to reach 45 mcm/d at the end of the conversion scheme.”
Drawing a parallel between Iran and China, he noted that there are about seven million CNG hybrids in the latter, which has helped reduce gasoline consumption by 130 million liters per day.
Referring to domestic manufacturers, Nejad-Ali said they have indigenized CNG kits and cylinders as per Russian standards.
Domestic Manufacturers
Ali Mahmoudian, the head of Alternative Fuels Union, believes that the project needs to gain impetus.
“As per the scheme, at least 1 million vehicles should have been retrofitted by now, but the figure has not exceeded 213,000 so far. Even at this slow rate, the scheme has decreased gasoline use by 500,000 liters per day and if the government wanted to import the same volume, it would have to spend $126 million on the strategic commodity per month,” he added.
The official noted that if the project had been implemented as scheduled, it could have saved close to 12 million liters of gasoline per day that is equal to the daily output of Tehran, Shiraz, Lavan, Tabriz and Kermanshah refineries.
Importing the same amount of fuel will cost the National Iranian Oil Company about $2 billion per day.
After the plan was approved by the Economic Council three years ago, NIOC started to equip all CNG retrofitting centers with kits and tanks, and the initiative made headway in the first two years, but it has not registered any progress over the last 12 months due to economic instability and wild fluctuations in foreign exchange rates.
According to the official, the current gasoline demand in Iran (100 million liters per day) will surpass supply (105 mlpd) in the foreseeable future and the most effective strategy to help prevent NIOC from becoming a gasoline importer again is by developing the loss-making CNG sector.
According to the official, the CNG industry cannot boom unless more gasoline-powered public transportation and commercial vehicles are converted to compressed natural gas hybrids.
Inflation Rate
Manufacturers of CNG kits and tanks should be supported financially, retailers’ profit margin must rise in proportion with the inflation rate and the price difference between gasoline and CNG should increase so that more motorists are encouraged to use CNG, Ardeshir Dadras, the head of Iran CNG Association, said.
But if CNG station owners are left to their own devices for long, efforts to convert vehicles to CNG hybrids will be in vain, he warned.
The CNG conversion scheme is free for taxis, pickups and commercial vehicles.
CNG fuel is sold at 2,400 stations, but NIOC is facing serious problems in increasing CNG pumps due to high land prices plus major hurdles in importing equipment and parts.
The US, European Union, Russia and China daily use 75 mcm, 45 mcm, 40 mcm and 25 mcm of the fuel, respectively. An estimated 15 million CNG-run vehicles ply the roads worldwide, of which 1.5 million are in Europe.
In the last decade, an estimated $2.4 billion were invested to expand CNG use in Iran.
Although CNG is a cheaper fuel, it has a shorter driving range than gasoline. As a result, running on a close to empty tank will reduce gas pressure and increase the risk of valves bursting. So, even if a car does use CNG, it is always wise to maintain a regular flow of gasoline.
