The gap between gasoline supply and demand is getting wider, as the former remains constant while the latter is on the rise, the head of Iran Energy Association said.
“To redress the imbalance in the short run, oil officials will have to either tap into the strategic gasoline reserves, or add organic chemical compounds such as benzene to the fuel to raise the volume of production,” ILNA also quoted Hashem Oraei as saying.
The disparity between supply and demand is estimated to be around 5 million liters per day and statistics released by the National Iranian Oil Company indicate that it will soon rise further, he added.
The official noted that Iran’s strategic gasoline reserves stand at 4 billion liters.
According to Oraei, who is also a lecturer at the Sharif University of Technology, NIOC data show daily gasoline consumption has reached 100 million liters per day, while all Iranian refineries are functioning at full capacity to produce 95 million liters/day and output cannot rise any further.
“The current consumption will rise by at least 7% in 2023,” he said, adding that there is no quick fix for the fuel shortage because plans for the construction of new refineries or manufacture of fuel-efficient cars are either infeasible or materialize in the long run.
Referring to other alternatives to curtail rising gasoline consumption and avoid imports, he said, “Pinning hope on automakers to manufacture energy-efficient cars has been an exercise in futility. They have shown utter negligence and indifference when it comes to producing vehicles whose mileage complies with global norms [less than 6 liters/100 km].”
Close to 800,000 new low-quality cars are added to Iran’s transport fleet, whereas old gas guzzlers are not sent to the junkyard.
Viable Option
Oraei said the most viable option to curb consumption is to accelerate the nationwide plan to convert 1.4 million gasoline-powered public transportation and commercial vehicles to compressed natural gas hybrids, which was launched in 2019.
“It is regrettable that despite its long-term financial and environmental benefits, the CNG conversion venture is moving at a snail’s pace,” he added.
According to Ali Mahmoudian, the head of the Alternative Fuels Union, as per the long-heralded scheme, at least 1 million gas-guzzlers should have been retrofitted by now, but has not exceeded 200,000.
Even at this pace, the scheme has helped cut gasoline use by almost 1.5 million liters per day and if the government wanted to import the same volume, it would have to spend $500 million a day, Mahmoudian revealed.
Mahmoudian noted that if the project was implemented as scheduled, it could save close to 12 million liters of gasoline per day, which is equal to the daily output of Tehran, Shiraz, Lavan, Tabriz and Kermanshah refineries.
“Importing that amount of fuel [12 million liters] would cost NIOC about $6.5 billion per year,” he added.
The average international price of gasoline is $1.5 per liter.
After the plan was approved by the Economic Council in 2019, NIOC started to equip CNG centers with the necessary kits and tanks. The retrofitting process made progress in the first two years but has stumbled in the last 12 months, due largely to economic constraints and the steep fluctuations in forex rates.
