Developing CNG industry to save Iran $14b

March 6, 2021 - 14:22

TEHRAN - Managing director of National Iranian Oil Refining and Distribution Company (NIORDC) has said that developing the country’s Compressed Natural Gas (CNG) industry could potentially save Iran $14b.

According to Alireza Sadeqabadi, increasing the country’s gasoline production capacity by 20 million liters requires at least $15 billion of investment, while boosting the country’s CNG output by the equivalent of the same amount would only need $1 billion, that means it could save the country $14 billion.

The development of the CNG industry in Iran began many years ago concurrently with the development of the national gas network and currently there is more than 40 million cubic meters of daily CNG distribution capacity in Iran, according to Sadeqabadi.

A large part of this capacity however is not being used, and this has led the government to try to benefit from this capacity by increasing the number of dual-fuel vehicles.

According to the NIORDC head, each cubic meter of CNG consumption would save the consumer 30 cents in comparison to one liter of gasoline.

Iranian Oil Ministry also considers CNG as the national fuel; therefore, the ministry has it on the agenda to increase the share of this fuel in the country's energy basket.

Considering the advantages of CNG consumption, back in December 2019, NIORDC and Iran’s state-owned Iran Khodro Company (IKCO) signed a memorandum of understanding (MOU) to add new dual-fuel vehicles to the country’s public transportation fleet.

The mentioned MOU was signed under a program that aimed to add 1.46 million dual-fuel vehicles to the public transportation fleet.

Increasing the number of the country’s dual-fuel cars would mean reduction in gasoline consumption; this gasoline could be exported and the earned revenues could be used for further developing such CNG-promoting programs.

Following the previously implemented programs, over the past few years, the government has started a new scheme for turning the automobiles registered in online transportation apps (like Snap and Tapsi in Iran) into dual-fuel cars.

Sadeqabadi noted that based on this program the government is going to pay for 75 percent of the conversion costs through bank loans offered to the car owners

Iran’s CNG consumption currently stands at about 25 million cubic meters.

There are currently 2,495 CNG stations across Iran that supply 22 percent of the country’s fuel basket.


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