The current daily consumption of compressed natural gas would have tripled over the last few years if policymakers had not failed to promote CNG-related schemes, a member of the CNG Trade Union of Iran said.
“The more CNG is used, the less gasoline will be consumed and the resultant surplus can be exported to foreign markets, earning at least $1 for each liter,” Mahmoud Qasemi was also quoted as saying by ISNA.
The current daily CNG consumption is around 20 million cubic meters that can approach 60 million cubic meters if decision-makers support initiatives to expand infrastructures and CNG use in heavy and light vehicles, he added.
The official noted that if the CNG sector had received the attention it deserved, the National Iranian Oil Company would not have faced the massive gasoline deficit that is widening by the day.
Doubling the share of CNG in the country’s energy mix can easily redress the imbalance between gasoline supply and demand.
Daily gasoline use is around 100 million liters, yet CNG consumption is barely 20 million cubic meters and if it is doubled, NIOC’s daily revenues can increase by $40 million.
“If it were not because of CNG, NIOC would have to start importing gasoline a long time ago.”
According to the official, close to $2.7 billion have so far been invested in the sector, helping NIOC save $7 billion annually.
“Plans are in place to reduce gasoline’s daily consumption by 50% by 2028 by replacing gasoline with CNG.”
According to the official, CNG stations have the capacity to supply 40 million cubic meters of CNG, but at present they are operating at half the capacity as fewer motorists are buying the eco-friendly fuel.
"Of the 20 million vehicles, over 5 million have hybrid CNG engines. This is while the share of CNG in fuel consumption is hardly 20% ... The bulk comes from gasoline,” he said.
Domestic Automakers
Qasemi said the manufacture of CNG hybrids has no place in the policies of domestic automakers, while the import ban on such cars is another problem.
“Despite having one of the most expanded natural gas networks in the world, CNG demand in Iran is about 20 million cubic meters per day,” he said.
According to estimates, the current gasoline demand in Iran (100 million liters per day) will surpass supply (105 ml/d) in the foreseeable future and the most effective strategy to help prevent NIOC from becoming a gasoline importer is by developing the CNG sector.
Unlike gasoline, eco-friendly CNG minimizes harmful carbon emission. This helps engines run more efficiently and increases the life of spark plugs.
Abundant gas deposits and cost-effective production justify replacing gasoline with CNG.
A nationwide plan is now underway for retrofitting 1.4 million gasoline-powered public transport vehicles and private cars to CNG hybrids.
However, since the launch of the plan three years ago, only about 200,000 gasoline-powered public transportation and commercial vehicles have been converted into CNG hybrids.
After the plan was approved by the Economic Council, NIOC started to equip all CNG retrofitting centers with kits and tanks, and the initiative made headway in the first two years.
Conversion Centers
The Ministry of Industries, Mining and Trade has set up and certified over 400 conversion centers in 25 provincial centers to help implement the scheme. But it has not registered any progress due to economic constraints and wild fluctuations in foreign exchange rates.
The scheme is estimated to require a budget of $570 million. If the funding problems are solved, CNG consumption is expected to reach 45 mcm/d at the end of the conversion scheme.
Iran has over 2,500 CNG stations and ranks fifth in global CNG consumption.
Boosting the CNG share in the fuel basket can have multiple gains, especially as it reduces gasoline demand and air pollution.
Motivating people to switch to natural gas has long been on the Iranian government’s agenda. However, these efforts have mostly been limited to major cities like Tehran.
Long before the free services became the topic of debate, NIOC started offering low-interest loans to owners of all commercial and passenger vehicles running on gasoline and diesel to convert them to CNG hybrids.
With the introduction of various incentives, CNG consumption in the country has increased, but the government aims to further promote the use of this clean fuel.
Its endeavors have been aimed at curbing fossil fuel consumption and reducing toxic emissions released into the air by diesel engines that are considered heavy polluters.
