Natural gas waste in Iran’s national grid is three times higher than the global average.
A report from the National Iranian Gas Company Dispatching Department says close to 26 billion cubic meters of gas is wasted in the network every year. “This huge volume is 9% of the total annual gas output at 290 bcm,” the company said.
It blamed ageing equipment, the 36,000 km network and more than 100 gas pressure boosting stations in use for almost three decades.
Gas wastage in countries with much bigger grids than Iran namely the US, Russia, Canada, China, Mexico and Ukraine is about 3%.
On average, each cubic meter of the subsidized natural gas is sold for 2,000 rials (1 cent) and 1,000 rials (0.5 cent) to households and industries respectively – a meager tariff that has encouraged consumers to be indifferent to appeals for cutting consumption.
Daily gas consumption in the household sector approached 700,000 cubic meters between December 5, 2020 and January 5, 2021, up 16% compared to the same period a year ago.
Bahman Salehi, secretary-general of the Iranian Technical and Engineering Services Export Association, says so long as the government insists on policies like subsidizing energy consumption will keep climbing.
Iran topped the list of countries subsidizing fuel in 2018, according to the International Energy Agency's latest report. Having spent $69.2 billion on energy that year it ranked first in the world leaving behind Saudi Arabia with $44.72 billion and China $44.44 billion.
Salehi said the Rouhani administration’s decision to exempt 9 million consumers that use gas within a certain range from paying their bills was not an informed choice.
“Such plans will not solve the gas problems. Reducing waste in the national grid and promoting prudent consumption will go a long way in alleviating shortages.”
It is noteworthy that Iran has the second largest gas reserves in the world after Russia.
As per a government proposal, households that use electricity within a certain range (less than 500 cubic meters per month in regions with moderate climate and less than 350 cubic meters in hot areas) have been exempt from paying bills staring last month.
According to the official, “passive diplomacy” in gas disputes with neighbors, namely Turkmenistan, has undermined Tehran’s declared policy to expand the gas export network. Iraq and Turkey are the only importers of Iranian gas.
Salehi added that importing gas from Turkmenistan to Mazandaran Province in the north makes more economic sense than producing and transferring it in Asalouyeh in the south and piping it to northern regions.
NIGC suspended gas import from Turkmenistan in 2017 implying that Turkmengaz, the national gas company of Turkmenistan, was selling the fuel at exorbitant prices.
"If the NIGC was more active in talks with the Turkmens, the country would not choose Afghanistan instead of Iran to export its gas to Pakistan.” Salehi recalled that cordial ties to neighbors is the best policy to secure a foothold in international markets.
