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CNG Industry Could Save Petrol Export Market

TEHRAN (NIORDC) __ Development of the CNG industry and the increase in consumption of the fuel, in addition to strengthening the opportunity to export Iranian petrol and helping to maintain its export markets, is also effective in managing energy consumption in the country.

According to IRNA, in 1975, natural gas was first used as automobile fuel in Iran. At that time, of course, gas-powered cars were very few, and only about a thousand vehicles were run by compressed natural gas (CNG) instead of petrol.

However, it took about 30 years for natural gas to seriously enter the country"s fuel mix and play a major role.In the 2000s, Iran tried to balance petrol consumption due to the jump in car production in the country and the increase in car per capita. In the meantime, the use of alternative fuels was raised.

At first, of course, liquefied petroleum gas entered the fuel mix of cars, and even in some places, liquid fuel distribution stations were built.Over time, however, it became clear that the use of liquid fuel in the fuel mix of cars is not only very dangerous but also economically unjustified, and its price cannot compete with petrol.

In return, the development of gas supply in the country and the arrival of gas lines to the farthest cities and villages created the opportunity for natural gas to be on the agenda again as an alternative fuel.Preliminary studies showed that Iran needed 2,500 CNG stations for 8.5 million vehicles to be run on natural gas instead of petrol.

However, the increasing trend of petrol consumption in the country continued until the late 2000s. Petrol rationing and price differences with CNG were the driving force behind the growing popularity of natural gas as a fuel of choice for cars.This accelerated the development of CNG stations in the country and now 2,493 CNG stations have been built nationwide.In fact, during this period, Iran has been able to achieve the first goal, which is to build 2,500 stations, but in terms of CNG consumption, about 60% of the capacity is still empty.

Although this amount has fluctuated in previous years and even reached less than 20 million cubic meters per day in years, with the re-rationing of petrol in 2019, the chances of consuming CNG increased.In addition to petrol quotas, the Economic Council"s decision to convert 1,460,000 public vehicles into CNG-run cars for free helped boosted consumption, and CNG consumption is now estimated at 23 million cubic meters.

Therefore, at least the consumption of CNG can be increased to 40 million cubic meters per day according to the installed capacities.In addition to having an important impact on energy consumption management, this issue also reduces petrol consumption and can help maintain Iran"s export markets.Now consumption of petrol in the country has increased compared to last year and even reached over 100 million liters per day.

Continuation of this trend will exclude Iran from the club of petrol exporters in the coming years and gradually petrol imports will resume.Meanwhile, about 20 million liters of current petrol consumption can be replaced by CNG, which will be equivalent to half of the Persian Gulf Star refinery"s output.In fact, with the development of the CNG industry, without large costs for refineries, a capacity of 20 million liters of petrol can be released, the export of which will pave the way for Iran"s activism in the region and hard currency generation.It will also increase Iran"s ability to respond to fluctuations in production and fuel prices and make energy mix management easier.

By increasing CNG"s share of the automotive fuel basket, Iran, in addition to being able to maintain its share of export markets, has also invested hundreds of billions of dollars in developing gas networks and use clean fuel to protect the environment.The development of CNG will also prevent $15 billion in costs of building a refinery to produce 20 million liters of petrol, and instead invest $1 billion in dual-fuel cars, saving the country $14 billion.On the other hand, while each cubic meter of CNG is sold in stations at a price of less than Rls. 5,000, the price of each liter of subsidized petrol is Rls. 10,500 and free petrol is Rls. 30,000. CNG will result in a 60 to 80% reduction in vehicle fuel costs. 

12:14 - 6/09/2021    /    Number : 13013    /    Show Count : 834