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CNG consumption up 31% following gasoline rationing

Consumption of compressed natural gas (CNG) in Iran has increased by 31 percent since the implementation of the gasoline rationing scheme, according to the National Iranian Oil Refining and Distribution Company (NIORDC).

As reported by IRNA, the country’s CNG consumption which stood at 19 million cubic meters (mcm) before the implementation of the fuel rationing scheme, now has increased to 25 mcm.

In mid-November 2019, the Iranian government started rationing of subsidized gasoline and increased fuel prices as it plans to use the revenue for supporting underprivileged families.

Later that month, the head of NIOPDC’s CNG promotion program announced that CNG consumption in the country had increased by 10 percent only two weeks after the beginning of the program.

According to Hassan Gholipour, there are currently 2,400 CNG stations across Iran and more than 2,478 compressors are installed in the country’s CNG stations.

Mohammad Baqer Nobakht, head of the Planning and Budget Organization, said on November 12 that proceeds from the price hikes would be used to fund additional subsidies for 18 million underprivileged families, or about 60 million people.

According to a statement published by National Iranian Oil Products Distribution Company, the price for a liter of regular gasoline was increased to 15,000 rials (nearly 35 cents at the official rate of 42,000 rials per dollar) from 10,000 rials and the monthly ration for each passenger car was set at 60 liters. Additional purchases would cost 30,000 rials per liter.

Due to heavy subsidies and devaluation of its currency, Iran has one of the cheapest fuel prices in the world and the country has been fighting rampant fuel smuggling to neighboring countries.

In one of its latest reports dubbed “World Energy Outlook 2018”, the International Energy Agency (IEA) put Iran on top of the list of the world’s countries for energy subsidies. That means Iran holds the first place among the world’s countries in terms of the amount of subsidies which is allocated to energy consumption.

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