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Iran Seeks Gasoline Self-Sufficiency.

Iranian Deputy Oil Minister Shahnazi Zadeh says he hopes Iran will 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. Due to a chronic lack of refining capacity, the world's fifth-largest crude exporter has to import at least 45% of its gasoline needs, i.e., about 208,500 b/d - making it vulnerable to any future sanctions which could interrupt that vital inflow.

Zaheh added: "We said by the end of the [Iranian] year 1391 [March 2013] hopefully Iran will become self-sufficient in all oil products". He says in fiscal 2009-10, Iran produced 44.6m litres/day of gasoline but consumed 64.9m litres/day, with the 20.3m l/d difference being made up by imports. However, independent Iran-based source on May 1 told APS the country now was importing over 29.2m l/d of gasoline.

To become self-sufficient, Iran would need a huge increase in refining capacity. Tehran plans to issue bonds worth $1bn to help fund the required investments. But this is way below an estimated $8bn required for expansion of Iran's refining capacity. Mehdi Varzi, an Iranian-born and London-based energy consultant, says Iran could become self-sufficient in three years if it manages to both add gasoline production capacity and raise domestic prices. He says planned refinery projects are all behind schedule, partly because of sanctions, adding: "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".

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 says: "We predict that this year the daily consumption will be 68 million litres of gasoline, but if we implement the subsidy law this will be reduced to 65 million". But the source on May 1 told APS consumption now was exceeding 70m l/d.

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Publication:APS Diplomat News Service
Geographic Code:7IRAN
Date:May 3, 2010
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