Demand for gasoline soared by 114% in the past few days as the government started easing coronavirus lockdowns, head of Iran Gas Station Owners Union said.
“Demand, which had plummeted (between March 15 and April 15) to less than 35 million liters/day due to the virus, has now reached 75 ml/d, the same volume used before the virus struck,” Homayoun Salehi was quoted as saying by ILNA.
Consumption is expected to rise further as the government suspended decades-old special traffic regulations in big cities like Tehran to encourage people to avoid public transport in which social distancing is not possible, he added.
Low-risk businesses in Iran reopened on April 12. A week later, the ban on intercity travel placed to curb coronavirus transmission was lifted and this too increased fuel consumption nationwide.
“Although high-risk workplaces, including gymnasiums, cinemas, beauty parlors, barbershops and stadiums have not reopened, daily gasoline demand from April 22 to April 30 shot up by 40 million liters – up 14% compared to the same time in the previous month.”
Health experts and senior medical probationers have openly warned the government that easing the lockdown will “undoubtedly” lead to an increase in coronavirus cases.
However, the administration says if people observe the strict health protocols risks will be minimized. The government in Tehran has said in unambiguous terms that it needs to strike a delicate balance between the health and economic needs of the people.
The government in Tehran has said in unambiguous terms that it needs to strike a delicate balance between the health and economic needs of the people
Closedowns and strict restrictions on businesses across the country have inflicted harm to the extent that many, if not most, have downed shutters and sent workers home.
According to Salehi, since mid-February, when it was officially announced that the virus had hit, people were warned to stay home to help fight the deadly disease. By mid-March sales at the gasoline stations declined by at least 40% only to increase by 50% in mid-April.
National gasoline consumption that was at 75 million liters per day in early February dropped to 60 million liters/day in March. Daily consumption was below 40 million liters in mid-April.
According to the National Iranian Oil Product Distribution Company, Tehran saw a substantial decline in fuel sales (in April). Gasoline consumption in the capital halved dropping below 8 million liters per day, indicating a steep decline compared to the first half of March, when consumption was near 20 million liters.
As the virus forced many people to self-quarantine, other provinces reported 50% to 70% decline in gasoline sales. Health officials in Tehran until Friday afternoon confirmed 95,000 cases of covid-19 infections with 6,100 deaths.
CNG Demand Low
In related news, the state news agency quoted Mohsen Johari, head of Iran CNG Station Owners Union, as saying that compressed natural gas consumption plunged by a massive 50% in April compared to the corresponding period in 2019.
“Daily demand stood at 20 million cubic meters last year, but fell to less than 10 mcm/d, down 50%.”
Although the lower price of CNG compared to gasoline encouraged many car owners to convert gasoline-powered engines to compressed natural gas hybrids, the virus outbreak decreased CNG sales dramatically in March and April.
One cubic meter of CNG is sold for 4,600 rials (2.8 cents), three times cheaper than gasoline. A liter of subsidized gasoline costs 15,000 rials (9.3 cents) and non-subsidized fuel 30,000 rials (19 cents).
Of the 19 million vehicles in Iran, five million plus have hybrid CNG engines while the share of CNG in total fuel consumption is 20%.
Iran is fifth in global CNG use with over 2,500 CNG stations. Boosting CNG share in the energy mix has multiple advantages, especially cutting healthcare costs due to the worsening air pollution and reducing demand for dirty fossil fuel that poison the environment and impose prohibitive health costs on families and the treasury.
