26,000 Tons of Gasoline on Offer at IRENEX

It is the first offer of the kind through the energy bourse after implementation of the controversial gasoline rationing and price rise scheme by the government on November 15. 

Fuel on offer includes 20,000 tons of octane 87 gasoline and 6,000 tons of octane 91, IRNA reported. 

The international wing of IRENEX will host the offering of 244,000 tons of gas oil and 2,500 tons of jet fuel today, according to Financial Tribune.

Potential buyers should first receive trading codes to be eligible to trade in IRENEX and may place orders via authorized brokerages. 

IRENEX has said it keeps the identity of buyers confidential, emphasizing that there are legal restrictions with regard to the identity of traders in the capital market.   

Since mid-summer, the government started offering surplus gasoline on the bourse. Neighboring states, where fuel prices are much higher, are the main buyers and oil officials say there are plans to find new markets. 

Exporting gasoline via IRENEX comes after the government said production had surpassed domestic demand and the nation had become self-reliant in producing the fuel that apparently has more buyers in foreign markets.

Higher Surplus

With the latest rationing scheme and unprecedented hike in prices at the pumps, observers forecast higher gasoline surplus in the coming weeks as consumption is expected to decline. The same is true for the unusually high levels (almost 10 million liters/day) of fuel smuggling from the porous border regions.

Generating revenue from gasoline export can be a new source of income for the government and help fix the ballooning budget deficit emanating from steep decline in oil exports (plunging from 2.5 million barrels per day to less than 500,000 bpd) due to the new US sanctions.

Increase in gasoline prices by 200% is predicted to add $2.5 billion annually to the treasury. The government has said it will use the new earnings exclusively for public welfare. 

Unlike a similar move to export crude oil through IRENEX, the government’s initiative to offer gasoline on the energy market has proved to be a good idea since inception.  A report on the value of trade via IRENEX covering the beginning of the current fiscal year (March 21) till Oct. 14 indicates that trading in different energy carriers generated $519 million in foreign currency.

The majority income was from the sale of diesel and gasoline, representing 43% and 30% of the contracts, respectively.