Iran: Use of Fuel Cards Starts in 4 Mega Cities

EghtesadOnline: After a 2-day delay, the first phase of using fuel cards at the filling stations commenced on Tuesday (August 13) in four mega cities, namely Tehran, Karaj, Isfahan and Tabriz.

News ID: ۷۴۸۱۷۳

14 August 2019

Fatemeh Kahi, head of National Iranian Oil Refining and Distribution Company (NIORDC) PR Office, was quoted by news outlets as saying.

"Car and motorcycle owners who either do not have or have yet not received their fuel cards can fill up using the special cards of gas station attendants. However, they cannot buy fuel over a certain limit in one day.

The limit to buy gasoline using the attendants’ cards is 40 liters per day for cars and will be reduced gradually to compel all motorists wanting to fill up to have their own cards, according to Financial Tribune.

The NIORDC has often said that the scheme has nothing to do with fuel rationing [at least not until March 2020].

Denying rumors about restrictions on daily gasoline supply, she said that there will be no limit for those who use their own cards.

She stressed that so long as the company is not assured that all vehicle owners have their own fuel card, the special cards of gas station attendants will be usable. NIORDC had earlier said that using the cards owned by gas station owners would not be allowed from the day the new rule comes into effect.

According to Amir Vakilzadeh, head of National Iranian Oil Products Distribution Company more than five million cards have been issued over the past six months, of which half a million are still in post offices to be delivered to their owners.

An estimated 3,900 filling stations have been equipped with updated hardware and software tools, he said.

There are over 24 million motor vehicles in Iran, including two- and four-wheelers, a big part of which are aging.

In its new decree, the state-owned company has urged car owners and motorcyclists who have lost their fuel cards or do not have cards to refer to the following to track or apply for a new card:

‘+10 Police’ offices

www.mob.gov.ir/fuel-track

www.niopdc.ir

www.epolice.ir

Smuggling & Overconsumption

Fuel cards were first introduced in 2007 to curb overconsumption. In six months consumption fell by 25 million liters. Eight years later in May 2015, the government announced gasoline would be offered at a single price of 10,000 rials for car owners nationwide without quota because of which vehicle owners stopped using their cards gradually.

However, energy expert Hassan Zia Kashani, the former head of NIOPDC, insists that fuel smuggling and consumption cannot be reduced unless the fuel cards are also used as vehicle ownership cards.

He says NIOPDC should install cameras at the gas stations that match the car registration number with the fuel card number and only if they are compatible should the pump activate.

"Operating such a system will be costly, but it can help cut consumption and smuggling because fuel cards then can neither be lent nor borrowed," he noted.

Referring to the huge volume of fuel smuggled from the porous border regions (almost 20 million liters/ day, he said that close to 350,000 fuel cards are being used in border provinces including Sistan-Baluchestan that do not belong to car owners in those regions and have been rented from vehicle owners in other provinces.

The discrepancy in fuel prices in Iran (7 cents/liter) and most neighboring countries (75 cents) has made fuel smuggling a highly lucrative and tempting trade with comparatively less risk.

As per official data, average daily gasoline consumption has increased from 87.1 million liters last year to 90 million liters now largely due to the new cars and the gas-guzzlers that are in abundance. NIOPDC produces 105 million liters of gasoline per day.