CNG Stations Nationwide Running at Half Capacity

CNG Stations Nationwide Running at Half CapacityCNG Stations Nationwide Running at Half Capacity

Only half of the capacity of compressed natural gas stations across Iran is being used, managing director of National Iranian Oil Refining and Distribution Company announced.

“There are currently 2,340 CNG stations in the country, the capacity of which is twice the volume of consumed CNG,” Seyyed Nasser Sajjadi was quoted as saying by ILNA.

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

Underscoring the need to increase the share of CNG in the nation’s fuel basket, Sajjadi said that although Iran has increased the capacity to 40 million liters of CNG per day, a daily average of 21 million liters are consumed.

The official noted that to encourage people to consume more of CNG, instead of gasoline, the pricing policy of CNG should be attractive for consumers.

“We should raise consumers’ demand for CNG, which means the manufacture of more CNG-fueled vehicles at lower prices,” he added.

Sajjadi stressed that the state-run company plans to include liquefied petroleum gas in Iranians’ fuel basket.

"NIORDC is conducting studies on the issue and LPG stations are expected to gradually go on stream from the beginning of the next Iranian year (starting March 20)," he said.

  Challenges Facing CNG Station-Owners

Ardeshir Dadras, the head of Iran’s CNG Association, told the Persian news website Tabnak that if the government would not raise CNG station-owners’ commission fee, many stations will shut down during the Iranian New Year holidays (March 20-April 2), as fuel demand increases considerably.

“A stoppage in CNG distribution will certainly give rise to gasoline consumption during the holidays,” he added.

Dadras said CNG stations are grappling with tough financial problems and if a new commission fee will not be approved and directed by the government, many stations will go bankrupt due to their growing debts.

“No rise in CNG station-owners' commission fee has gone into effect since the beginning of the current year. This is while the fee for gasoline sales has been raised by the government,” he said.

Referring to the current 800 rials (around 2 cents) commission fee, Dadras noted that the National Iranian Oil Refining and Distribution Company had pledged to increase the fee by 25% in the past two years as per the inflation rate.  

Morteza Ebrahimi, a member of the association, also said over the past two years, CNG-station owners have faced inflation rates of 15.6% and 12.6% and a rise of staff salary by 25% and 17% respectively.

Ebrahimi added that in case the commission fee is not be raised in the remaining days of the Iranian year, CNG stations will probably fail to serve consumers in the holidays, as they have to pay the salary of their staff, which adds up to their previous debts.