The CEO of the National Iranian Oil Refining and Distribution Company has stated that the government’s fuel pricing policies are gradual and flexible. He confirmed that the first and second gasoline quotas together meet the needs of 85% of the population, and their rates will remain unchanged.
Mohammad-Sadeq Azimifar, speaking in a televised interview on the evening of September 6, defined the energy imbalance as the gap between production and consumption. He noted that since March 2021, gasoline consumption has grown at an average annual rate of about 6%. Meanwhile, despite no new refineries being built after the launch of the Persian Gulf Star Refinery in 2017, the current administration has boosted production growth to 5% through measures such as increasing refinery feedstock, process reconfiguration, and utilizing idle gasoline-unit capacity.
He added that even with this 5% production increase, continued 6% consumption growth has widened the supply-demand gap, putting pressure on foreign currency reserves to cover imports. In the first five months of the current Iranian year, average daily gasoline consumption stood at roughly 132 million liters, while total refinery and non-refinery production averaged about 122 million liters—indicating a daily shortfall of around 10 million liters.
Azimifar pointed out that consumption has remained stable compared to last year due to management measures, but stressed that the fuel imbalance results from long-standing structural factors in the country’s energy governance.
Efficiency Improvements and Refinery Expansion Plans
Emphasizing that the country is now at its highest historical level of gasoline production, Azimifar detailed operational measures, including transferring naphtha from the Persian Gulf Star Refinery to idle gasoline-making units at other refineries in Isfahan, Tehran, and Tabriz. Timely overhauls and catalytic regeneration have also maximized existing refinery capacity.
He said the government has prioritized semi-finished refinery projects based on progress and weekly monitoring, removing obstacles along the way. Two new refineries with a combined capacity of 180,000 barrels per day will soon come online, adding 12–13 million liters of gasoline and 5 million liters of gasoil daily. However, sustaining these gains requires controlling and limiting annual consumption growth.
Non-Price and Price Roots of Rising Consumption
Azimifar attributed rising consumption to both price and non-price factors. On the non-price side, he cited the annual addition of 1–1.5 million vehicles to the fleet against low scrappage rates, as well as non-compliance with fuel-efficiency standards in some domestically produced cars. Over the past three years, nearly 700,000 old vehicles have been scrapped—a record achievement toward the goals of the Seventh Development Plan.
On pricing, he noted that fixed fuel prices and the narrowing price gap between gasoline and CNG have reduced CNG consumption from 24 million cubic meters per day in 2020–2021 to 15–16 million, leaving this capacity underutilized—despite $3 billion invested in CNG infrastructure and a 64% rise in dual-fuel vehicle conversions.
Non-Price Measures and Optimizing Fuel Allocation
Azimifar highlighted the government’s success in eliminating gasoil imports through management measures, prioritizing non-price policies for gasoline. Quota allocations, previously distributed inefficiently up to 175 million liters, have been streamlined. Fuel for government vehicles is now priced at the highest rate, and directives require fleet renewal and reduced personal car use among managers and employees—including one car-free day per week and greater use of public transport.
Describing the government’s price approach, he stressed the principle of gradual change to allow behavioral adaptation and avoid shocks. This lets policymakers adjust based on social feedback. He clarified that the third-tier price change does not affect the 80–85% of households that consume within the first and second quotas (60 liters at the base rate and 50 liters at the second rate). The policy mainly targets excess consumption above standard patterns, which is covered by imports—especially as global product prices have risen sharply.
Regional Pilot Successes and Distribution Reform
Azimifar cited successful regional pilots in Kerman and Sistan-Baluchestan provinces, where emergency station cards were eliminated and quotas were transferred directly to personal cards. This reduced queues, increased satisfaction, and cut inefficient consumption by 15%, while preventing misuse. The emergency card now serves as a demand-management tool to avoid sudden pressure on the distribution network. Operational limits on refueling frequency have also boosted alternative fuels: in Kerman, CNG consumption rose 30% after distribution reforms.
Logistical Resilience and Smart Refueling
He noted that despite enemy efforts during the recent conflict to disrupt fuel supply chains—including targeting facilities and oil depots—the logistics network adapted and maintained supply stability in sensitive areas like Tehran and Alborz provinces.
A new plan to “identify” free station cards is being implemented to overcome traditional time and physical restrictions. After identity verification at the station, the system checks the national ID code via the integrated MANA system to determine the driver’s remaining quota and allowed request. Users then pay with bank cards according to the tiered pricing structure, without time or physical limits. The pilot phase will conclude by late September, with nationwide rollout expected by mid-October.
Fleet Quality Upgrades and Government Support
Azimifar emphasized that demand management must go hand-in-hand with fleet modernization. The government has reduced import tariffs on electric vehicles to 4% and on hybrids by 15%. The president has also given automakers an ultimatum to phase out high-consumption vehicles in favor of hybrid and electric technologies, alongside targeted scrappage of old cars, as strategic priorities to reduce energy intensity.
Commitment to Gradual Change and Crisis Resilience
The government has designed price policies to be phased and seasonal, avoiding shock therapy. During the recent war, despite attacks on key energy infrastructure, all planned price adjustments were suspended to avoid burdening the public. While many countries resorted to rationing in similar crises, Iran maintained supply stability through logistics management.
Azimifar noted that Kharg Island was targeted 550 times in recent months, and the refining sector lost six workers, yet fuel distribution remained uninterrupted. Currently, 160,000 staff work around the clock to ensure no disruptions.
Multi-Agency Decision-Making and Public Feedback
He stressed that gasoline policy is not solely the oil ministry’s decision; in recent months, 10–15 meetings were held with the president’s participation, involving the Plan and Budget Organization, the Energy Optimization Organization, the ministries of economy, roads, interior, and security agencies. The national broadcaster also contributed by encouraging conservation. The government remains open to public feedback and will adjust policies as needed to enhance welfare, reduce the gasoline shortfall, and cut import costs—redirecting resources to productive sectors.
Fuel Quality: A Red Line
Azimifar reiterated that fuel quality is a red line for the oil ministry. Since the current administration took office, four quality-upgrade projects worth $900 million have been completed, including the Shiraz refinery isomerization project, raising its output to Euro 5 standard. Similar projects at Isfahan, Abadan, and Tehran refineries are advancing; the Tehran project, due by year-end, will add 1.5 million liters per day and upgrade production to Euro 5. Currently, Tehran and other major cities receive Euro-standard gasoline, with Euro 4/5 fuel transported from Shazand refinery to the capital.
No Methanol in Gasoline
Regarding claims about methanol in gasoline, Azimifar clarified that the national fuel standard—developed with automakers, the Environmental Protection Organization, and the National Standards Organization—allows up to 3% methanol as an octane booster, a common global practice. However, Iran has not widely used methanol; only laboratory studies and one pilot test at a refinery occurred, using about 0.5% methanol. That trial has ended, and no methanol is currently in distributed gasoline. He suggested that contrary statements may stem from misinformation or other motives, referring technical questions to the environmental and standards authorities.
Tehran Consumption Spiked 30% Due to Rumors
Azimifar addressed recent temporary station closures and queues in Tehran, noting that consumption suddenly rose about 30%, from a normal 20 million liters per day to 26 million. While similar peaks occurred during early war days due to evacuations, the recent surge was mainly driven by rumors about gasoline prices. Logistical constraints during the conflict also required supply from neighboring provinces, causing brief disruptions over one or two days. Queues have now subsided, and conditions have returned to normal.
Internet Taxis’ Quotas Unchanged
He confirmed that fuel quotas for internet-based taxis have not changed. However, given their high mileage, the third-tier price change may affect their operating costs. Two solutions are under review: converting active ride-hailing vehicles (especially those with over 3,000 km/month) to CNG/LPG at government expense, or allocating mileage-based fuel quotas similar to those for public taxis. These measures aim to prevent extra costs for drivers and avoid price hikes for ride-hailing services.
Government Listens to Public and Union Input
Azimifar acknowledged that government performance is not flawless and thanked the public for their patience and understanding. He apologized for any shortcomings and assured that the administration—backed by the president—remains open to criticism and suggestions from unions and transport associations. Compensatory measures are being prepared for affected sectors, with details to be announced separately. The government, he said, may need to make tough decisions for the common good, but it will always listen and revise policies when necessary.