Shell in Negotiations to Market Iran's Jet Fuel

EghtesadOnline: Royal Dutch Shell has opened negotiations to sell Iranian jet fuel in international markets, chief executive officer of the National Iranian Oil Products Distribution Company said.

News ID: ۷۴۲۹۹۱

25 July 2017

"Shell is willing to market and sell the jet fuel produced in Iran in international airports, especially in the Persian Gulf littoral states," Mansour Riahi was quoted as saying by IRNA on Monday.

"Shell, as a leading brand, will be authorized to commercialize Iran jet fuel, should the ongoing negotiations yield positive results," Riahi said, adding that the Anglo-Dutch major would be able to supply its customers with the fuel in Imam Khomeini International Airport and sell the much-needed commodity in global markets, Financial Tribune reported.

According to the official, the country exports jet fuel to Armenia, Afghanistan, Iraq, Central Asia and Pakistan.

Jet fuel is a specialized type of fuel used to power aircrafts. It is generally of a higher quality than what is used in heating or road transport.

Pointing to the launch of the Persian Gulf Star Refinery in the port city of Bandar Abbas in May, the official said Iran's jet fuel production capacity, among other fuels, is expected to rise by 370,000 liters a day as soon as the refinery is in full swing.

Shell, which was forced by sanctions to cease trade with Iran in 2010, resumed the purchase of crude oil in 2016. The company also paid €1.77 billion ($2 billion) it owed the NIOC, settling debts after international sanctions were removed early last year.

According to reports, Shell is also considering to invest in and build a gas-to-liquids plant in Iran.

Gasoline Marketing

Criticizing the outdated system of managing gas stations in the country, Riahi said, "A limited number of gas stations in Isfahan are selling branded gasoline. The plan will be implemented in other major cities, including Tehran, in the near future."

Referring to the total number of fuel stations in Iran, the official noted that there are 3,600 gasoline and diesel as well as 2,400 compressed natural gas stations across the country, which are all subsidiaries of the Oil Ministry.

As they cannot be supervised strictly, a pilot program has started from mid-January 2017 to distribute top-grade "branded" gasoline in select filling stations in central Isfahan Province as part of measures to improve fuel quality and services.

"The government has held three rounds of tender for privatizing gas stations and 53 companies, including 10 in Tehran, have been granted the required licenses to sell gasoline under their own brand in their stations," he said, adding that the companies will charge customers the same fee in the beginning.

Nonetheless, as soon as they are graded based on the quality of the services, they can compete to attract more customers.

Riahi believes that the privatization of gas stations will help NIOPDC to gradually scale down its operational role and instead improve its supervisory role over the distribution of gasoline and other fuel products.

A shortage of gas stations in Iran, particularly in the big cities, creates long queues of cars every day. 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.

According to the NIOPDC data, Iran has one gas station for 22,000 people.