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EghtesadOnline: The Iranian government is rolling out a nationwide scheme to convert their fossil fuel-powered vehicles to CNG hybrids by providing all car owners with cheap loans.

Motivating people to switch to natural gas has been on the Iranian government’s agenda for long. However, the efforts have mostly been limited to major cities like Tehran, ISNA reported.

As per the scheme implemented by the National Iranian Oil Refining and Distribution Company, low-interest loans are being offered to owners of all commercial and passenger vehicles running on gasoline and diesel to convert them to CNG hybrids. 

Director of NIORDC’s CNG Office Hamid Qasemi said loans amounting to 25 million rials ($187) are being offered in collaboration with Bank Parsian and Post Bank of Iran, according to Financial Tribune.

Previously, a similar plan was implemented by the state-owned company. According to initial reports, organizers were set to offer two million loans to applicants. 

"However, the limits have been removed to help more drivers go through the vehicle conversion," he said.

Owners of gas guzzlers should refer to the website to apply for the loan. 

According to Qasemi, 36,000 drivers have so far filled application forms.

Depending on the type of vehicles, the total cost of conversion is about 30 million rials ($225).



Extended Network

According to Qasemi, the Alternative Fuels Union, affiliated to the Ministry of Industries, has set up 1,100 special centers across the country for the conversion. 

"Together, the centers can daily retrofit up to 30,000 vehicles running on diesel and gasoline into CNG hybrids," he said.

The vehicles will be tested after retrofitting to ensure all safety standards have been observed. 

A similar plan was implemented on a smaller scale last November, converting more than 30,000 diesel-powered commercial vehicles into CNG hybrids.

CNG is natural gas under pressure, mostly made of methane, and is odorless, colorless, tasteless and non-corrosive. There are over 2,400 CNG stations in Iran.

Totally, the country has over 22 million vehicles, 4.5 million of which are gasoline-powered and 5.3 million are CNG hybrid vehicles.



Long-Term Plan

With the introduction of various incentives, daily CNG consumption in the country has reached 21 million cubic meters. However, the government aims to further promote the clean fuel. 

Its endeavors have been aimed at curbing fossil fuel consumption and reducing toxic emissions released by diesel engines seen as heavy polluters, contributing terribly to air pollution in Iran.

However, according to the latest reports, the CNG consumption can increase to over 40 million cubic meters a day.

The National Iranian Oil Refining and Distribution Company reports that in the past 11 months to April, gasoline consumption was 90 million liters per day. This is while gasoline in Iran is costlier than CNG.

One cubic meter of CNG costs 4,140 rials (3 cents), while a liter of gasoline is sold at 10,000 rials (7 cents).

CNG is projected to comprise 35% of Iran's total fuel consumption by the end of the Sixth Five-Year Economic Development Plan (2017-22). To achieve this goal, the government recently launched an initiative to motivate more drivers to convert their gas-burning vehicles to CNG hybrids.


Iran Cheap CNG Loans CNG hybrids