The government has banned the transit of gasoline, diesel and other petroleum products to neighboring countries until the end of the current year (March 2021).
“The decision is in the interest of the country as we now sell our products at the land borders at good prices,” spokesman of the Petroleum Products Exporters Union said.
“Given that both domestic consumption and export markets have been imperiled due to the coronavirus, we need to maintain markets near our own borders so that the operations of our refineries are not disrupted,” Hamid Hosseini was quoted as saying by ILNA
Iran has provided fuel to neighboring countries including Armenia, Iraq, Afghanistan and Azerbaijan’s Nakhchivan Autonomous Republic for years. However, some neighboring countries like Turkmenistan are trying to reach these markets, such as in Afghanistan and Iraqi Kurdistan, and this is not in the country's interest, he added.
“The Oil Ministry has suggested that the government ban the transit of gasoline and diesel and other oil products from other countries via Iran,” Hosseini noted.
The proposition has been approved by the administration to manage the current special situation. However, cargo that is on the way or have already entered Iran are exempt for this rule.
Enforcing the new ban comes as Iran is trying to promote its own exports of gasoline and other fuels amid a sharp decline in domestic consumption.
Recent government data shows that demand for gasoline inside Iran has dropped to around 55 million liters per day, about 30% lower than last November. Total gasoline production in the country has reached 115 million liters per day.
According to Hosseini, one liter of the fuel can be sold at about 50 cents to neighboring states, earning an estimated $5.5 billion a year.
Exports Normal
Export of petroleum products including mazut, diesel and gasoline that was interrupted in March and April due to covid-19, has resumed as countries ease the lockdowns giving rise to the consumption of oil derivatives.
Iran’s tally of confirmed virus cases exceeded 136,000 on Monday. So far about 7,500 people have died because of the deadly disease.
Confirmed coronavirus cases around the world have crossed 5.5 million with deaths near 347,000.
According to the official, in 2018 the value of Iran's oil derivatives export to Iraq exceeded $9 billion. But the coronavirus hurt bilateral trade.
Diesel, kerosene, jet fuel and liquefied natural gas, including LNG and LPG, are exported to the neighboring countries via land borders.
Pointing to the value of trade, he said: "Close to $25 billion in petrochemical, petroleum, natural gas and power exports is generated annually."
Of the total ($25b), $12 billion is from petrochemicals. Petroleum byproducts 33% ($8 billion) and the balance from electricity and natural gas exports.
