Compressed natural gas stations are ready to provide at least 40 million cubic meters of fuel a day, head of the Iran CNG Association said.
“Now that CNG is three times (30%) cheaper than gasoline, some motorists and taxi drivers would be willing to fill up with CNG,” Ardeshir Dadras was quoted as saying by ILNA.
Raising gasoline prices was a good idea because it can help increase eco-friendly CNG consumption, the official said in contrast to the views of the common people and economic experts that believe the timing and amount of price increase was inappropriate.
Each cubic meters of gas is sold for 4,600 rials (3.5 cents), while a liter of subsidized gasoline costs 15,000 rials (12 cents) and non-subsidized fuel twice this amount (30,000 rials).
According to the official, CNG consumption declined 15% since May when gas prices rose by 10% while gasoline prices were unchanged.
“Unlike previous years when CNG use annually increased by at least 10%, the trend has reversed in the past six months, yet it is expected to rise by the yearend due to the rise in gasoline prices since Nov. 15,” Dadras said.
National Iranian Oil Products Distribution Company said Thursday night that gasoline would be sold at 13 cents a liter up to 60 liters for each car every month. Additional purchases will cost double.
The official had said earlier that so long as the difference between the two tariffs (natural gas and gasoline) was not tangible motorists would not go for CNG.
Prior to the new plan gasoline prices were not proportional to other energy carriers like CNG, a wrong policy that was taking a toll on consumption and CNG stations were working at half capacity.
CNG stations sell 20 million cubic meters of gas every day that is likely to double because of the government’s decision to raise gasoline prices, he said.
Iran is ranked 5th in global CNG consumption. There are over 2,500 CNG stations across the country.
The US, European Union, Russia and China use 75 mcm, 45 mcm, 40 mcm and 25 mcm of the fuel daily An estimated 15 million CNG-run vehicles ply the roads in the world, of which 1.5 million are in Europe.
Small Share
"Of the 19 million vehicles in Iran, over 5 million have hybrid CNG engines. This is while the share of CNG in fuel consumption is hardly 20%.
More than $2.4 billion has been invested in Iran to expand CNG use in the last decade and contribute to the global effort to reduce the CO2 footprint.
The trend of increasing the number of CNG stations has gradually slowed down in recent years.
Pointing to the cost of CNG equipment and maintenance, Mohammadreza Mousavikhah, managing director or the NIOPDC said private companies are no more interested in putting money in CNG filling stations because of the high and rising costs (especially land prices) and shrinking profit margins.
Multiple Advantages
Boosting CNG share in the fuel mix can have multiple advantages, especially cutting gasoline demand, improving the environment, reducing air pollution and exporting fuel.
Low-carbon and clean fuel can help the country export liquefied fuels namely diesel and gasoline, the NIOPDC official said.
According to Hashem Oraei, a faculty member at Tehran's Sharif University of Technology, people's interest in natural gas vehicles notwithstanding, carmakers have done nothing to manufacture NGVs because they have enough customers for their gasoline-fueled poor quality gas guzzlers.
Iran has one of the biggest gas grids in the world and although CNG is relatively cheaper than gasoline, local car companies continue to make gasoline-powered vehicles that contribute terribly to the toxic air in the rapidly expanding urban areas.
The main disadvantage of CNG is its low energy density compared to liquid fuels. A gallon of this gas has only a quarter of the energy in one gallon of gasoline.
