Despite the rise in gasoline production in recent years, promoting the use of environmentally-friendly compressed natural gas instead of eco-unfriendly gasoline is imperative to reduce fuel consumption, secretary-general of the Association of Iranian Refining Companies said.
“As domestic gasoline use is approaching 100 million liters per day, the National Iranian Oil Company that produces about 110 million liters of gasoline on a daily basis will have to import the fuel unless motorists are encouraged to replace gasoline with CNG,” Nasser Ashouri was also quoted as saying by ILNA.
“If the severe competition between gasoline producers and consumers does not stop, self-sufficiency in gasoline production will be a thing of the past and exports will be replaced with imports.”
Encouraging car owners to shift to natural gas should be on the government agenda, as the construction of new oil refineries is not only time-consuming but also incurs prohibitive costs.
Ashouri said the construction of new refineries is out of question because even if the fund is ready, projects to build modern refining complexes need at least six years to get off the ground.
The investment of $1 billion in CNG sector, as an alternative green fuel, will help replace 20 million liters of gasoline with 20 million cubic meters of CNG per day.
“Expanding the current gasoline output capacity [110 ml/d] by 18% or 20 million liters a day requires at least $15 billion, which is not good economics compared to investment in CNG,” he said.
Thanks to the vast natural gas reserves of Iran, the development of CNG sector (either to increase the number of CNG-hybrid vehicles or add 20 mcm to the current daily production) would deliver in less than two years.
One cubic meter of CNG costs 4,600 rials (1.8 cents), which is about four times cheaper than gasoline. A liter of subsidized gasoline costs 15,000 rials (6 cents) and non-subsidized fuel 30,000 rials (12 cents).
Fuel-Efficient Cars
Automakers should be required to manufacture fuel-efficient cars to help the country make better use of the valuable commodity, Ashouri said.
Referring to domestic production of hybrid cars, he said automakers have so far manufactured half a million hybrid CNG engines a year, “which has now declined to 40,000”.
He said of the total 19 million vehicles in Iran, five million plus have hybrid CNG engines, accounting for 20% of overall CNG consumption.
Iran has the capacity to produce 40 million cubic meters of CNG per day.
CNG consumption is growing and projected to exceed 24 mcm/d by the end of November as more vehicles are being retrofitted, he added.
Globally, Iran is fifth in CNG consumption with 2,400 CNG stations nationwide.
Unlike gasoline, eco-friendly CNG minimizes harmful carbon emission. This helps engines run more efficiently and increases the life of spark plugs. Iran has extensive natural gas resources and an efficient network of pipelines.
Motorists averse to the conversion say CNG tanks are heavy and take considerable storage space in the trunk of small sedans like Pride.
“The administration should support refining complexes by making investments in eco-friendly plans, which will help them raise profitability that in turn can increase their products’ quality and boost the employment rate,” the official said.
Noting that the association was formed about eight years ago to help oil refining companies move toward their goals, Ashouri said it is responsible for taking a number of measures, such as preventing “unhealthy” competition, enhancing the quality of products of refineries and subsidiary companies, introducing the firms and their abilities to domestic and foreign consumption markets, safeguarding their rights and increasing business transparency.
Ashouri stressed that the association calls for the modification of regulations to prevent state and private refineries’ bankruptcy and the provision of special inexpensive loans to refineries to help them implement development projects and establish new refineries.
According to the Oil Ministry’s news portal, the association’s seven main members account for 80% of Iran’s output of liquefied gas, gasoline, kerosene, diesel, mazut, sulfur, jet fuel and other commodities.
