Iran's crude processing capacity has experienced a 30% rise over the last seven years.
According to IRNA and based on information from the National Iranian Oil Company, refineries in Iran could barely process 1.8 million barrels of oil per day in 2013. Nonetheless, the capacity to convert crude to value-added products including diesel and gasoline has now reached 2.4 million bpd.
Close to 60 million liters of gasoline were produced in the country in 2013, none was compliant with Euro-4 and Euro-4 emission standards.
The figure jumped 91% and approached 115 million liters/d in 2020, of which 78% or 90 million liters comply with the Euro-4 and Euro-5 emission standards.
Put it simply, oil refining companies are doing reasonably well as production and export of gasoline has been of the ascending order.
The National Iranian Oil Refining and Distribution Company (NIORDC), a subsidiary of the NIOC, imported 30 million liters of gasoline per day in 2006 to meet the demand that was around 55 ml/d at the time, IRNA reported based on information from the Oil Ministry.
As refining expansion took hold between 2007 and 2014 (in Lavan, Banda Abbas, Abadan, Arak and Isfahan), output increased and imports were cut to 7 ml/d in 2015 when demand was 70 ml/d.
After inauguration of the first phase of Persian Gulf Star Refinery in Hormozgan Province in 2018, import of the strategic fuel was consigned to history. With completion of the second and third phases (of PGSR), NIORDC started exporting gasoline as supply outweighed demand for the first time in four decades.
Domestic refineries produced 112 million liters of gasoline on a daily basis in 2019, whereas demand was 98 ml/d and the surplus was exported to neighbors namely Iraq (mostly the Iraqi Kurdistan Region) and Afghanistan.
Expanding Inventory
Gasoline export is being promoted to manage the expanding inventory of the fuel largely due to falling domestic demand thanks to the Covid-19 pandemic.
Similar to most nations struck by the plague, gasoline demand in Iran has fallen as people avoid social gatherings to help fight the highly contagious disease. Up until Saturday health authorities announced over three million coronavirus infections and 82,000 deaths.
Iran has been exporting gasoline for two plus years despite the tough US sanctions. Industry data show Tehran has not only managed to continue exports, but has boosted foreign sales of the fuel three-fold.
Gasoline consumption which was 98 million liters per day in 2019 declined in 2020 as Covid-19 spread. Gasoline sales did not surpass 75 ml/d in the last five months. This is while NIORDC had forecast consumption would jump to 120 ml/d in 2020.
Diesel Output
Referring to diesel output, IRNA noted that the state-run NIOC has increased its production by 20% over the last seven years.
Refineries across Iran produced 100 million liters of diesel in 2013, which has now amounted to 120 ml/d.
According to Hamid Qassemi, the director of the CNG office of the National Iranian Oil Refining and Distribution Company, diesel consumption has jumped to astonishing levels over the last few years.
"The figure was about 77 million liters per day in 2018. Now it is in the neighborhood of 95 ml/d, up 23%."
If such high consumption is not reduced, NIORDC will have to stop exports and start importing diesel in the near future, he warned.
Qasemi opined that the high consumption crisis stems primarily from the ageing heavy vehicles, which has not only resulted in excessive fuel consumption but also contributes terribly to air pollution. There are 130,000 vehicles in Iran’s truck fleet the manufacturing dates of most of which go back 25 to 30 years.
Replacing 50% of the depleted trucks will reduce diesel consumption by at least 1 billion liters per year, he claimed.
According to the Roads Ministry Iran needs 15,000 new trucks each year to renovate its aging clunkers.
More than 4,000 goods transport companies are active across the country moving 380 million tons of cargo every year. Some 860 companies transport 4.6 million tons of freight from domestic ports to destinations in Europe, Central Asia and the neighboring countries.
