Two opposing narratives about the CNG industry: a 7 million cubic meter reduction in consumption and the closure of stations in the shadow of officials’ denial!

According to Energy Press, although in 2013, Iran had 3.5 million CNG-fueled vehicles, which was known as the largest fleet in the world, currently, in addition to reduced consumption and income, the owners of this fuel stations are struggling with challenges. On the one hand, the resolution to increase the station fee by 70 percent, which was approved by the ministers, has been gathering dust in the desk drawer for years; on the other hand, the wheels of production of dual-fuel vehicles – the backbone of this industry – have stopped moving, although, according to the director of CNG projects, support plans are being implemented to produce more of this type of vehicle. The problem of power outages at stations and the lack of price advantage of this fuel over gasoline have also contributed to this reduced consumption, which has led to a decrease in drivers’ willingness to use CNG.
From the perspective of oil industry activists, the use of CNG could be the key to solving the problem of gasoline imbalance, foreign exchange outflow from the country, and reducing emissions, especially in large cities like Tehran. However, according to Reza Nikzad, a member of the board of directors of the CNG Association, the compressed natural gas (CNG) industry in Iran has faced an unprecedented decrease in consumption from 23 million cubic meters per day to 16 million cubic meters over the past two years. Recently, statistics have been released of the closure of several hundred stations due to the aforementioned problems. Energy Press began following up on these statistics and conducted an exclusive interview with Saeed Rahman Salari, director of CNG projects.
CNG stations have not been closed
Contrary to the statistics of CNG station closures in the country, Saeed Rahman Salari, Director of CNG Projects at the National Petroleum Products Distribution Company, said: “No station has been closed, and since the launch and equipping of CNG stations in the country, an average of only 5 to 7 percent of them have been closed, but currently about 94 percent of the stations are active, which indicates the relative stability of this industry. The reasons for the closure of some stations include technical overhaul, the identification of dangerous equipment by the National Standards Organization, legal problems, and low economic efficiency. However, there are challenges such as low station fees. About 400 stations in the country are facing low sales, whose income does not cover their costs. If this problem continues, these stations may face disruption. Therefore, a solution must be found to address this challenge.”
Resolution to increase CNG station fees under government review
According to the announcement of the Director of CNG Projects in Iran, a resolution to increase CNG station fees has been drafted by the Ministry of Oil, the Planning and Budget Organization, and the Support Organization and is currently under review by the Cabinet. For this resolution to be finalized, the government needs to propose it and issue the relevant approval. Although the exact percentage of the fee increase is not yet known, this issue has been placed on the Cabinet’s agenda and the necessary follow-ups are being carried out.