NIORDC: Private Sector Allowed to Import Gasoline

EghtesadOnline: Private Iranian companies are allowed by law to import gasoline, a top energy official said on Tuesday, indicating that the government is in the process of gradually reducing its monopoly on fuel production and distribution.

News ID: ۷۳۹۷۲۵

10 February 2017

"Regarding gasoline imports, the Oil Ministry is primarily concerned with the quality of foreign grades. There is no barrier against the private sector importing gasoline if the fuels meet the Euro-4 emission standards," said Abbas Kazemi, the managing director of National Iranian Oil Products Distribution Company, Mehr News Agency reported.

The official made the statement on the sidelines of the launch of three single gas pumps in Tehran.

Observers say the move, if properly implemented, will introduce competition in the country's fuel retail market by giving consumers the option to buy state-produced gasoline or imported grades of higher quality with different price tags, according to Financial Tribune.

Kazemi said that there are approximately 20 million vehicles, including motorcycles, across the country and the government is facing difficulties in providing efficient services in the fuel supply and distribution chain.

"The government is unable to meet the (full) demand for petroleum products and private companies should chip in," the senior official said in a very rare admission of problems associated with gasoline production and sale that has been under government control forever.

Tehran has sought to bolster the private sector's role in fuel supply by privatizing dozens of petrol stations nationwide, making gas station owners responsible for storage, transportation and distribution of gasoline and the related costs.

The government announced two rounds of tender for privatizing a total of 140 gas stations last year and a third tender is expected to be held later this month for 60 petrol stations.

The tenders are part of efforts to hand over the fuel retail business to private companies and curb the bloated bureaucracy in the large and growing energy market.

Single Gas Pumps Launched

Three single gas pumps were launched in Tehran on Tuesday in a ceremony attended by Kazemi.

The gas dispensers are located in Tehran's District 22, the capital's most northwestern district and one of the recently developed regions on the outskirts of the sprawling metropolis.

It was not clear if the fuel dispensers have one or several nozzles to allow multiple cars to fill up at the same time.

Single gas pumps are aimed at easing the long queues of cars in Tehran's limited number of filling stations.

Compared to gas stations, standalone petrol pumps are far less capital-intensive and easier to maintain, making them a viable investment for companies with limited capital.

According to the NIORDC, Tehran Province has a total of 284 gas stations with 150 in the capital city. According to Tehran Traffic and Transportation Organization, between 3 million and 3.5 million vehicles are on the streets, which roughly translates into only one filling station for every 10,000 to 12,000 vehicles.

Data show that there is one gas station for every 7,500 people in the UK and one for every 2,600 people in the US.

Every day 15 million liters of gasoline is supplied to Tehran Province, two-thirds of which is sold in the capital alone, according to Veys Karami, director of NIORDC operations in Tehran Province.

"We are studying proposals from 36 companies who seek to build single gas pumps in Tehran and Shahr-e-Ray (southwest of Tehran)," Karami said.

Kazemi says the shortage of filling stations is more "conspicuous in some  roadways where motorists have to drive 70-80 kilometers to get from one gas station to the next".