Importing gasoline to plug fuel shortage is not feasible, as per capita gasoline consumption in Iran, with a population of 83 million, is above the global average, the head of the Energy Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture said.
“The stopgap solution may have short-term benefits, but it is illogical, unsustainable and ineffective in the long run because the more fuel is supplied, the more demand rises and the vicious cycle will never end,” Arash Najafi was also quoted as saying by ILNA.
For a country in which gasoline consumption is three times higher than that of China, importing gasoline to redress the imbalance is a recipe for disaster, as the ever-growing demand will never stop and reducing the demand will remain a far cry, he added.
Echoing the views of many energy experts, the official noted that as long as gasoline demand is not managed efficiently, other strategies on the supply side such as importing the fuel, building new refineries, upgrading old facilities and tapping into the strategic gasoline reserves will not yield the desired result.
Supply-side management approaches, including plans to import the fuel, should be replaced with demand-oriented management plans, such as getting rid of dilapidated gas guzzlers that have outlived their usefulness, building new highways to reduce traffic congestion, forcing automakers to manufacture energy-efficient vehicles, developing telecommunication infrastructure and expanding electronic government services to curb inter-city travel demands, he added.
On the other hand, focusing on the demand side, raising public awareness, promoting wise consumption patterns, taking advantage of advanced know-how to manufacture fuel-efficient cars, upgrading urban transportation systems, accelerating CNG conversion schemes and increasing fuel prices are more likely to help the National Iranian Oil Company avoid gasoline import.
According to the official, developing infrastructures to boost crude processing capacity is necessary, but the National Iranian Oil Company has neither the funding nor the time as gasoline demand will exceed demand in the near future, because of which unsustainable supply-oriented management policies could do little to ease the growing gasoline crisis.
Transport Fleet
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.
“The policy to send dilapidated cars to the scrapyard is no longer pursued due to the government’s budget deficit and this has exacerbated the appalling situation in the fuel sector,” he said.
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.
“Raising gasoline prices is not the solution either,” Najafi said, adding that fuel prices have risen 3,000 times over the last 40 years but the demand is still on the rise.
“If pricing policies were supposed to work, there wouldn’t be a wide disparity between demand and supply.”
All refineries in Iran are producing at full capacity (100 million liters of gasoline/day) and output cannot rise any further over the next five years. Of this volume, 99% are burnt locally and demand is on the rise incessantly.
“NIOC will need to import gasoline from June, if efficient alternative plans like compressed natural gas conversion plans fail to move forward,” he said.
Drawing a parallel between Iran and more populated countries like China, the NIOC data revealed that close to 450 million liters of gasoline are burnt in China daily and this is while its population is over 1.5 billion.
The National Iranian Oil Refining and Distribution Company, a subsidiary of NIOC, started to export the fuel to international markets, namely Iraq, Afghanistan, the Persian Gulf littoral states and the semi-autonomous region of Iraqi Kurdistan in 2019.
Although NIOC has announced that it has no plans to import fuel to meet the rising domestic demand, the firm will have to make the bitter choice sooner or later.
Iran put an end to dependence on the costly import of gasoline in 2019.
Gasoline imports reached 12 million liters per day in 2016 when Iranians burnt almost 74 million liters of gasoline daily. Import quotas dwindled to 3 ml/d by mid-2018 and were completely stopped in 2019.
