Steep Rise in Diesel Consumption in Iran

EghtesadOnline: Diesel consumption since the beginning of the current fiscal year in March has jumped to astonishing levels compared to last year, director of the CNG office of the National Iranian Oil Refining and Distribution Company said.

News ID: ۷۸۴۸۸۳

23 September 2019

"The figure was about 77 million liters per day in 2018. Now it is in the neighborhood of 85 ml/d, up 11%," Hamid Qassemi was quoted as saying by IRNA.

If such high consumption is not reduced, NIORDC will have to stop exports and start importing diesel in the near future, he warned.

Qasemi opined that the high consumption crisis stems primarily from the ageing heavy vehicles, which has not only resulted in excessive fuel consumption but also contributes terribly to air pollution. There are 130,000 vehicles in Iran’s truck fleet the manufacturing dates of most of which go back 25 to 30 years, according to Financial Tribune.

Replacing 50% of the depleted trucks will reduce diesel consumption by at least 1 billion liters per year, he claimed.

According to the Roads Ministry Iran needs 15,000 new trucks each year to renovate its aging clunkers.

More than 4,000 goods transport companies are active across the country moving 380 million tons of cargo every year. Some 860 companies transport 4.6 million tons of freight from domestic ports to destinations in Europe, Central Asia and the neighboring countries.

Qasemi went on to say that (the government) is prepared to replace 18,000 urban diesel-powered buses. The move is aimed at reducing air pollution and fuel consumption in Tehran and other big cities, which experts blame on inadequate, old and inefficient road vehicles.

CNG Hybrids

NIOC is in talks with the Industries Ministry to sign a memorandum of understanding to convert 100,000 fossil fuel-powered trucks to CNG hybrids, he added.

Abundant gas deposits plus cost-effective production justify replacing gasoline and diesel with compressed natural gas, the official said echoing the stance of economic experts and environmentalists.

"Iran has a big gas network and although CNG is less expensive than gasoline, we continue to manufacture gasoline-powered cars instead of natural gas vehicles (NGVs)," Qasemi rued.

One cubic meter of CNG costs 6,000 rials (4.5 cents), while a liter of gasoline is sold at 10,000 rials (9 cents), meaning filling a tank with 20 cubic meters of gas costs two times less compared to the highly pollutant gasoline, he noted.

Referring to the billions of dollars the government pays in fuel subsidies, the official said, "Shifting from gasoline to CNG is not a convenience, it is a compulsion.”

Fuel Quality

In related news, NIORDC rejected a report issued by Tehran Air Quality Control Company on gasoline and diesel quality in the capital this summer.

Based on the report, both fuels contained sulfur above acceptable levels (80 parts per million for diesel and 170 PPM for gasoline).

Referring to a new report issued by Iran National Standards Organization, he said sulfur content in distributed regular and premium (unleaded) gasoline in Tehran is 50 PPM that complies with the European Union standards.

"Sometimes fuel tanks carried by trucks are not washed properly in which case the quality of fuel is adversely affected and samples show sulfur content above acceptable standards."

According to Qasemi, thanks to the fuel's improving quality, NIORDC has started selling octane 95 gasoline at the Iran Energy Exchange international ring since October for the first time in the history of Iran’s oil industry. The fuel is exported to Afghanistan, Turkey, Pakistan and Iraq.

Iran was a gasoline importer for almost four decades because local refiners could not meet growing demand. Now it is self-reliant and in a position to start exports.

According to Oil Minister Bijan Namdar Zanganeh, Iran produces 15 million liters of gasoline more than domestic need, and the surplus is stored. Daily gasoline output increased from 52 million liters in 2012 to 110 million liters in June.