Quality Fuel Ensures Success of Commercialized Gas Stations

Quality Fuel Ensures Success of Commercialized Gas Stations
Quality Fuel Ensures Success of Commercialized Gas Stations

Enhancing the outward appearance of gas stations will not appeal to car owners, as what they want is quality gasoline at a reasonable price, not luxury gas stations, stressed the head of the Iranian Syndicate of Gas Station Owners.

“The details of commercializing gas stations plan are yet to be announced,” IRNA quoted Bijan Haj-Mohammad Reza as saying. “As long as quality and variety of the fuel offered in gas stations do not change, customer satisfaction will not be fulfilled.”

Referring to oil prices sliding to new 11-year lows, the official noted that gasoline price in the country is approaching that of Persian Gulf freight on board, minimizing the profit margin dramatically for the gas station owners. Needless to say, transportation costs are added to the expenses.

“Most gas stations are on the verge of bankruptcy, as they cannot reap half as much profit as they could in the past, yet their administration costs are on the rise on a daily basis,” he said.

According to the official, foreign companies will never embark on importing gasoline to Iran for $0.66 per liter and then selling it at half the price.

“However, if gasoline prices are floated and foreign companies can offer a diverse range of fuels with varying qualities, the commercialization of gas stations will yield positive results,” he said.

Pointing to India as a glaring example, he added, “Royal Dutch Shell launched a commercialized gas station in India which was wildly welcomed by car owners as they felt a major difference between the quality of what Shell offered with that of normal Indian gas stations.

Haj-Mohammad Reza believes that commercialization will help enable different companies to compete by supplying customers with a wide range of products.

The Oil Ministry plans to commercialize gas stations and the first gas station brand will be unveiled in the near future.  

“For the first time, gas stations will be operating under brand names in Iran,” he said.

The move comes as dozens of single gas stations equipped with one fuel dispenser and a couple of pumps are planned across Tehran in the near future. This is aimed at helping address the capital’s lack of gas stations and heavy traffic, while preventing wastage of time and fuel. The proposal was made by the Oil Ministry and approved by the parliament.

  Smart Fuel Cards Waste Time

Referring to the implementation of the smart fuel card plan since 2007, the official said, “As gasoline is offered at a single price of 10,000 rials (30 cents) for car owners nationwide without a quota, smart cards should be scrapped since they only waste people’s time waiting in long queues while filling up their tanks in gas stations.”

Criticizing the fact that gas station owners have to shoulder the financial burdens of the plan, he noted that in the beginning, certain state companies were supposed to pay the expenses, but later gas station owners had to cover the costs.

Haj-Mohammad Reza approves of linearization of gasoline prices, but is against imposing any limitations on fuel supply.

On May 26, 2015, the government stopped selling subsidized gasoline to private vehicles at 7,000 rials (20 cents) per liter. Since then, regular gasoline is offered at a single rate of 10,000 rials (30 cents) for car owners nationwide without a quota, while unleaded gasoline costs 12,000 rials (35 cents) a liter.

 In 2013, there were 11.4 million private vehicles in Iran, the International Organization of Motor Vehicle Manufacturers said in a report based on statistics from 141 countries.

Vehicles per capita in Iran are estimated to be 164 for every 1,000 individuals, which is lower than the global average of 174.

Ministry of Roads and Urban Development announced in March currently 17 million vehicles, including public and private, are plying the Iranian roads.