Iran Cuts Diesel Imports to Zero

A Tuesday report by the Tasnim news agency cited figures from Oil Ministry’s oil products company (NIORDC) which showed that demand for diesel in the country’s vehicles and machinery sectors had decreased by 5 million liters per day in the first five months of the calendar year that started in late March.

The report said the fall in domestic consumption of diesel had enabled the NIORDC to cut its imports to zero.

It said that diesel production in Iran had also increased by 3 million liters per day year on year in the five months to late August, further boosting domestic supplies.

The report said the NIORDC had increased its supply of gasoil to power plants by 27% in April-August compared to the same period last year.

Gasoil is a type of diesel that is used in power plants and by off-road vehicles and machinery.

More than 80% of Iran’s power plants are connected to the country’s natural gas pipeline network, but they are forced to use gasoil and mazut for electricity generation in colder months of the year when demand for gas increases across the country.

NIORDC figures showed that tighter controls on domestic use and smuggling of diesel to neighboring countries were the main factors contributing to the fall in diesel imports into Iran in the past five months.

In a statement in July, the company reported a major fall in demand for diesel, saying it was the result of better checks on smuggling, including restrictions on diesel delivery to motorists and farmers, which it said reduced diesel supplies reaching smugglers on the borders.

Government estimates published last year suggested that nearly 30 million liters per day of gasoline and diesel were smuggled to neighboring countries, where prices are sometimes 100 times higher than rates charged inside Iran.

Iran has the cheapest fuel prices in the world, with a two-tier pricing system for diesel that does not currently exceed 6,000 rials ($0.068) per liter.

Iran’s Central Headquarters for Combating Goods and Currency Smuggling said in May that fuel smuggling was inflicting an annual loss of approximately $4 billion on the country.