Iran to Hold 3rd Major Tender for Filling Stations in Feb.

Several dozen filling stations are planned to be tendered next month, marking the third major bidding for privatizing gas stations in less than six months, said Jafar Sobhani, an advisor to Iran Privatization Organization.

"A total of 60 gas stations will be put out to tender on Feb. 12 after two successful rounds of tenders" last year, Sobhani was quoted as saying by IRNA on Tuesday.

The tender is expected to raise at least $100 million. The filling stations are located in 13 provinces, including 15 in Tehran and 22 in Khuzestan and Hormozgan in the south.

According to Sobhani, the down payment for the gas stations is 30% with the remainder to be paid in installments over 2-4 years.

Last month, tenders for 40 gas stations in 15 provinces, namely Markazi, West Azarbaijan, Fars and Tehran, reportedly generated at least $70 million.

In September, tenders for 100 gas stations in 25 provinces drew 333 bids with a total value of $112 million. The tendering process marked one of the largest privatization bids in the country. 

There are around 3,600 gas stations in Iran, of which 191, or roughly 5%, are owned and run by the government. A shortage of gas stations in Iran, particularly in the big cities, creates long queues of motorists 24/7. 

According to reports, there is one gas station for every 7,500 people in the UK and one for every 2,600 people in the US. But according to National Iranian Oil Products Distribution Company data, in Iran there is one gas station for 22,000 people.

The tenders are part of efforts to hand over the fuel retail business to private businesses and further curtail government monopoly in the energy market. 

Iran's economy is reportedly 85% state-owned.

According to Mansour Riahi, managing director of the, privatization of gas stations will help NIOPDC to gradually scale down its operational role and instead shift to supervisory position in the distribution of gasoline and other fuel products.

Tehran has also reportedly tinkered with the idea of allowing foreign firms to operate in the local retail energy market.

Domestic media reported in late 2015 that Royal Dutch Shell and French energy giant Total S.A. had acquired the rights to own and operate a total of 200 gas stations across Iran. Officials in Tehran categorically denied any such arrangement.

Analysts argue that the presence of international automotive fuel brands in Iran is contingent on real competitiveness, notably the license to import premium quality fuel and deregulation of the price of gasoline and other fuels to bolster competition. However, observers say none of such moves seem likely in the foreseeable future.