Converting 1.4m Gasoline-Powered Vehicles to CNG Hybrids in Iran

EghtesadOnline: National Iranian Oil Products Distribution Company and Bank Mellat signed an agreement on Sunday to contribute to a plan to convert gasoline-based vehicles to hybrid CNG engines.

News ID: ۷۴۹۲۰۱

16 December 2019

According to the MoU, $510 million required to convert 1.4 million gasoline-powered vehicles, including pick-up trucks, taxis and vans, to CNG hybrids will be paid by Bank Mellat, the Oil Ministry news agency Shana reported.

According to the High Council of Economic Coordination, the government will provide grants to pick-up trucks, taxis and vans.

The government raised gasoline prices by 50% to 200% on November 15. NIOPDC said on Nov. 14 midnight that subsidized gasoline would be sold for 13 cents a liter up to 60 liters for each car every month. Additional purchases will cost double, Financial Tribune reported.

Rise in CNG Consumption

However, as CNG prices have not risen so far, its consumption increased by three million cubic meters a day during the three weeks after the plan (Nov. 15-Dec. 6). Each cubic meter of gas is sold for 3.5 cents, three times cheaper than gasoline.

Before gasoline was rationed, average daily CNG consumption was 19.2 million cubic meters (Oct. 23-Nov. 14). The figure reached 22.2 mcm/d soon after.

Of the 19 million vehicles in Iran, over 5 million have hybrid CNG engines. The share of CNG in fuel consumption is 20%.

More than $2.4 billion has been invested to expand CNG use in the last decade and contribute to the global effort to reduce the CO2 footprint.

Iran is 5th in global CNG consumption. There are over 2,500 CNG stations in the country. Boosting CNG share in the fuel mix can have multiple advantages, especially cutting gasoline demand and reducing air pollution.