Call For Further Cut in CNG Prices

Call For Further Cut in CNG Prices Call For Further Cut in CNG Prices

Gas station owners' association has called for a further 15 percent decrease in compressed natural gas (CNG) prices, Tasnim news agency quoted Ardeshir Dadras the head of CNG association board of directors as saying.

"Our proposal, which is being studied in the Economy Council, is to lower the price of each kilo of CNG to 5000 rials ($0.14). And the oil ministry agrees with such a price cut," Tasnim news agency quoted him as saying. CNG prices currently stand at 6,000 rials (13, and 17 cents) kilogram.

He said in Iran, compared to other states, CNG is 100 percent costlier. "Currently the price discrepancy between gasoline and CNG is 60%, whereas logically speaking it should be 30%, which explains why it accounts for less than four percent of Iran's fuel basket."

Expressing concern that CNG consumption has not changed in recent years, Seyed Naser Sajedi managing director of the National Iranian Oil Refining and Distribution Company (NIORDC) says people will not opt for such fuel unless it is more economical than gasoline, "That is why effective steps need to be taken to motivate consumers to utilize such non-toxic and non-corrosive fuel."       

CNG consumption currently stands at 18.5 million cubic meters per day. The figure is expected to reach 23 mcm when new CNG stations come into service.

Talking on the sidelines of the 20th International Iran Oil, Gas, Refining and Petrochemical Exhibition in Tehran Abbas Kazemi the deputy oil minister said," CNG prices should be regulated to encourage consumers to use less gasoline," suggesting that the slight discrepancy in price is the primary cause of rising gasoline consumption, and a disincentive to CNG consumers.

Iran is one of the leading countries promoting CNG with 2,249 stations. More than $2.4 billion has been invested to expand CNG use, and close to 22,000 individuals are employed in this industry.