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EghtesadOnline: Oil refining companies in Iran are doing reasonably well as production and export of gasoline has been of the ascending order in the past 14 years.

The National Iranian Oil Refining and Distribution Company (NIORDC), a subsidiary of the National Iranian Oil Company, imported 30 million liters of gasoline per day in 2006 to meet the demand that was around 55 ml/d at the time, IRNA reported.

As refining expansion took hold between 2007 and 2014 (in Lavan, Banda Abbas, Abadan, Arak and Isfahan), output increased and imports were cut to 7 ml/d in 2015 when demand was 70 ml/d.

After inauguration of the first phase of Persian Gulf Star Refinery in Hormozgan Province in 2018, import of the strategic fuel was consigned to history. With completion of the second and third phases (of PGSR), NIORDC started exporting gasoline as supply outweighed demand for the first time in four decades.

Domestic refineries produced 120 million liters of gasoline on a daily basis in 2019, whereas demand was 98 ml/d and the surplus was exported to neighbors namely Iraq (mostly the Iraqi Kurdistan Region) and Afghanistan.

According to Mehdi Mirasharfi, head of Iran Customs Administration, in the first five months of the current fiscal year (started March 20), gasoline export revenue was more than $1 billion.

“Gasoline comprised 10% of the total export in the period and was underpinned by the decline in domestic consumption and increase in production.”

Gasoline export is being promoted to manage the expanding inventory of the fuel largely due to falling domestic demand thanks to the Covid-19 pandemic.


Plunging Demand 

Similar to most nations struck by the plague, gasoline demand in Iran continues to fall as people avoid travel and family and social gatherings to help fight the highly contagious disease. Up until Monday health authorities announced over 475,000 coronavirus infections and 27,200 deaths.

Iran has been exporting gasoline for two plus years despite the tough US sanctions. Industry data show Tehran has not only managed to continue exports, but has boosted foreign sales of the fuel three-fold.

Data from consultancy FGE put total gasoline exports in March-July at 173,000 barrels per day on average, up from 30,000 bpd in January-February. 

Gasoline consumption which was 98 million liters per day in 2019 declined this year as Covid-19 spread and so did lockdowns consigning larger numbers of people to their homes. Gasoline sales did not surpass 75 ml/d in the last five months. This is while NIORDC had forecast consumption would jump to 120 ml/d in the outgoing year.


Processing Capacity

Daily PGSR processing capacity has reached 480,000 barrels and on average 45 million liters of gasoline and 17 million liters of diesel are produced at the huge complex. 

The refinery uses gas condensates from the offshore South Pars Gas Field in the Persian Gulf that has been pivotal in eliminating the need for costly gasoline imports.

According to data tracked by the Tehran Chamber of Commerce, Industries, Mines and Agriculture, oil products worth $108 million were traded in the international ring of the Iran Energy Exchange in one month to August 15. Gasoline, diesel and heavy naphtha were the main items.

After the US under Donald Trump walked away from the historic nuclear deal in May 2018 and vowed to drive Iran's oil exports to zero, the Tehran government has been doing all it can to counter the hostile US moves and continue exporting oil.

However, the role and significance of crude oil export revenue is declining slowly but steadily in the national budget -- a development long demanded by academia and economic experts understandably concerned about volatile global oil prices and pushing for weaning the economy away from the fossil fuel. 


Output Iran export gasoline Oil refining companies