Gasoline Offer Continues on IRENEX

EghtesadOnline: Sale of gasoline on the Iran Energy Exchange will not be affected by the government decision on Friday to increase fuel prices and assign quotas, the managing director of IRENEX said.

News ID: ۷۴۹۰۰۷

23 November 2019

“The price rise is for domestic sale. This fuel is not offered for internal use,” Ali Hosseini said.

“All products at IRENEX are offered in the international ring and only for export,” ILNA quoted him as saying on Saturday.

In a previously unannounced move, the government communicated a gasoline rationing scheme midnight Thursday and tripled prices. The new measures came into effect immediately, Financial Tribune reported.

There had been regular reports and rumors about gasoline price rises and rationing for several months almost all of which were strongly denied by senior government officials and the refiners.

Pointing to the outstanding capacity of Iranian refineries in producing gasoline, Hosseini said the export market would not take a hit by the domestic developments.

Regarding the excess gasoline production, he said “IRENEX is able and willing to supply the neighboring countries’ need for gasoline”.

Since mid-summer, the government has started offering surplus gasoline on the energy bourse. Neighboring states are said to be the main destinations while officials have said there are plans to also export the fuel to other countries.

Exporting gasoline via IRENEX comes after official announcement that production had surpassed domestic needs and the nation had reached self-reliance in producing the strategic fuel.

Local refiners produce 15 million liters of gasoline over and above daily domestic demand. Average daily domestic consumption is at or around 92 million liters.

A Former Major Importer

For almost four decades Iran imported fuel, especially gasoline, because local output could not meet growing demand.

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

The initiative to export surplus gasoline started for the first time in the history of Iran’s oil industry in July when the National Iranian Oil Refining and Distribution Company sold 3,000 tons of octane 91 gasoline to Afghan companies via the energy market.

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 for the treasury.

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