Demand for gasoline declined by 20% in the past 30 days after summer holiday trips ended, the head of Iran Gas Station Owners Union said.
“Consumption, which had soared [between July and September] to more than 120 million liters/day due to the peak travel season, has now reached around 100 ml/d,” Homayoun Salehi was also quoted as saying by ILNA.
The disparity between supply and demand between July and September reached 15 million liters per day as the National Iranian Oil Company’s maximum production capacity is 105 ml/d, he added.
The official pointed out that to redress the imbalance, NIOC had to tap into the strategic gasoline reserves, which was a cause for concern.
The official noted that Iran’s strategic gasoline reserves hold 4 billion liters.
Now that demand has declined by 20 ml/d, there is a balance between supply and demand, although it will not last long as consumption is expected to surpass 120 ml/d in March 2023 when the Persian New Year starts in March 2023 and a large number of families embark on holiday tripss.
The NIOC data show daily gasoline consumption has reached 100 million liters per day, while all Iranian refineries are functioning at full capacity to produce 105 million liters/day and output cannot rise 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 building new refineries or manufacturing fuel-efficient cars are either infeasible or materialize in the long run.
Referring to alternatives to curtail rising gasoline consumption and avoid imports, Salehi 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 [of less than 6 liters/100 km].”
Close to 800,000 new low-quality cars are added to Iran’s transport fleet annually, whereas old gas guzzlers are not sent to the junkyard.
Feasible Alternative
According to Hashem Oraei, the head of Iran Energy Association and a lecturer at the Sharif University of Technology, the most feasible alternative 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.
Ali Mahmoudian, the head of the Alternative Fuels Union, said as per the long-heralded scheme, at least 1 million gas-guzzlers should have been retrofitted by now, but the figure 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,” he added.
The official 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.
Mahmoudian said importing that amount of fuel [12 million liters] would cost NIOC about $6.5 billion per year.
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.
