Gasoline consumption is projected to reach an unprecedented average of 135 million liters per day in summer, the head of Gas Stations Guild Union said.
“A 35% rise in consumption has been estimated by the National Iranian Oil Products Distribution Company, as most Iranian families will take their summer trips between June and September,” Asadollah Qolizadeh was also quoted as saying by ILNA.
Data released by NIORDC, a subsidiary of the National Iranian Oil Company, show that the current consumption (100 million liters per day) will witness a 35% rise to reach 135 ml/d, he added.
The official noted that although all Iranian refineries are functioning at full capacity, NIORDC’s maximum daily output will not exceed 110 million liters for the next five years, meaning the company will either have to import fuel to bridge the gap or tap into the strategic reserves.
Iran’s strategic gasoline reserves hold 4 billion liters.
Gasoline demand in Iran dropped to an all-time low of 75 million liters per day in 2019 when the government announced fuel price hikes.
However, the current price of gasoline in Iran is around a tenth of prices charged in neighboring countries, causing a major surge in fuel smuggling across the borders. That comes as the government has indicated it has no plans to increase fuel prices.
Close to 800,000 new low-quality cars have been added to Iran’s transportation fleet, whereas old gas guzzlers are not sent to the junkyard. If the current trend of consumption were to continue, the country will surely face problem in meeting domestic demand.
Premium Gasoline
The official noted that demand for premium gasoline has declined by 80%, because of which NIORDC has decided to reduce its output.
Due to low demand (around 2 million liters per day), premium gasoline production is not a priority for NIORDC, he added, noting that the firm produces limited amounts of this fuel as “few station owners order because it must be sold at unsubsidized prices [10 cents per liter, twice as much as that of regular gasoline]”.
If the demand keeps declining, it is likely that the company may stop producing it totally.
Premium gasoline has an octane level of 91 as opposed to regular fuel with an octane number of 87.
The higher the octane number, the less pollution it will cause upon use.
Each liter of regular gasoline costs 5 cents and most motorists prefer to buy the cheaper fuel and so filling stations are not interested in purchasing the premium grade.
Qolizadeh noted that losses caused by the evaporation of premium gasoline are high and it is not economically feasible to keep it in storage tanks for long periods.
