Efficient Railroads Needed to Help Curb Fuel Consumption in Iran

EghtesadOnline: Total annual energy consumption in Iran is almost equal to the energy produced by burning 1.4 billion barrels of crude oil.

News ID: ۷۴۷۲۸۵

11 May 2019

The Iran Fuel Conservation Company says more than 35% of the energy is consumed in buildings. Industries and agriculture account for 24% and 17% respectively and the remaining (24%) or the equivalent of 320 million barrels is used for transportation.

Regarding energy consumed in the key transportation sector, gasoline, diesel and natural gas comprise 48%, 34% and 15% respectively.

Energy officials, including Mohsen Delaviz the head of IFCC, say the massive energy consumption for transporting people and goods is rooted in old and dilapidated vehicles plus poor intra-city and intercity railroads, Financial Tribune reported.

With the growth in population, rail transport has long emerged as effective solution to rising national budgets, road mishaps, costly subsidies and help curb traffic congestion and cargo transport.

Efficient railways further contribute to the convenience of the people because of their safe and eco-friendly features.

Although railroad is one of the world’s oldest transportation systems, it still is one of the most energy efficient ways to move large numbers of people and goods.

Experience in the developed and developing world illustrates that railroads are a visibly better, safer and cost effective alternative for moving people and goods.

A case in point is India’s railroad system, which has played a fundamental role in the country’s development, transporting people and goods across its vast territory.

Rail passenger traffic in India has increased by almost 200% since 2000 and freight traffic by 150%, yet latent demand for mobility in India remains huge. For example, on average, each Indian travels about 3 km per day by privately owned road vehicle, compared to 17.5 km in Europe.

Iranian officials have been oblivious to the fact that extending railroads can play a key role in curbing energy consumption and the prohibitive fuel subsidies.

The length of railway lines in Iran at 13,000 km (2,000 km less than Kazakhstan), is 5 times shorter than India at 70,000 km, which is the fourth longest in the world. Not only does Iran rely heavily on road transport to move cargo and people, it must also spend billions on gasoline and diesel subsidies.

There are close to 20 million vehicles in Iran of which 1.3 are not road worthy. The figure is expected to rise to 2 million in less than five years.

International Energy Agency data show Iran paid $45 billion only in energy subsidies in 2017 -- up 55% compared to 2016.

Of the total, $16.5 billion was allocated to oil and oil byproducts, namely gasoline and diesel, $12.3 billion to the struggling electricity sector and the remaining to natural gas.

Share of rail cargo in Iran has increased from 8.5% to 12% between 2013 and 2017. Nonetheless, more efforts are required to extend the national railroad.

According to the officials of Islamic Republic of Iran Railways, lines are being developed to connect Iran with Basra in Iraq and with Herat in Afghanistan.

The Iranian government has confirmed its determination to develop railroad projects by the end of Sixth Five-Year Economic Development Plan (2017-22).

In 2017, the parliament adopted a bill that allocates a fixed 1% of national oil revenues to expand the railroad sector.