Iran seeks to become self-sufficient in gasoline by 2013

Saturday, April 24, 2010

TEHRAN: Iran hopes to become self-sufficient in gasoline within three years, as policies to suppress demand and increase refining will finally free it from a precarious reliance on imports, a minister said on Friday.

Due to a chronic lack of refining capacity, the world’s fifth-largest crude exporter has to import at least 30 percent of its gasoline needs – making it vulnerable to any future sanctions that could interrupt that vital inflow.

“We said by the end of the [Iranian] year 1391 [March 2013] hopefully Iran will become self-sufficient in all oil products,” deputy oil minister, Shahnazi Zadeh, told a news conference at an energy trade fair in Tehran.

Zadeh said in 2009-10, Iran produced 44.6 million liters of gasoline every day but consumed 64.9 million liters, the difference being made up by imports. Domestic gasoline production will rise this year to 45.6 million liters a day, Zadeh said. So to become self-sufficient, Iran would still need a huge further increase in refining.

Iran plans to issue bonds worth $1 billion to help fund the required investments, he told reporters.

Mehdi Varzi, a London-based energy consultant, said Iran could become self-sufficient in three years if it manages to both add gasoline production capacity and raise domestic prices.

He said planned refinery projects were all behind schedule, partly because of sanctions.

“It is possible. It depends on how quickly they can bring one of the many planned refineries on stream … they could become self-sufficient in gasoline provided they also cut subsidies,” Varzi said.

A controversial policy to slash subsidies which currently mean Iranian motorists have access to greatly discounted fuel prices, would limit any growth in demand, Zadeh said.

“We predict that this year the daily consumption will be 68 million liters of gasoline [per day], but if we implement the subsidy law this will be reduced to 65 million,” he said.

The US is pushing for a fourth round of UN sanctions on Iran over its nuclear work, which is unlikely to directly impact on gasoline imports. – Reuters

Source: http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=114137#axzz0lzvpADYI