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Following statements by Oil Minister Javad Owji on April 12 regarding the commencement of gasoline production from methanol by petrochemicals, Hamidreza Hajibabaee, head of the Budget Integration Commission, also approved a $2.7 billion contract with petrochemicals for gasoline production.
Methanol gasoline poses serious hazards due to its toxic nature and unique combustion properties. It contains high levels of methanol, a highly flammable and toxic substance, which, when burned, releases harmful byproducts like formaldehyde. This can lead to health issues and environmental pollution. Methanol’s lower energy density compared to traditional gasoline also results in incomplete combustion, leading to increased emissions of carbon monoxide and nitrogen oxides, and worsening air quality.
Referring to the daily consumption of 123 to 124 million liters of gasoline in the past year, Hajibabaee said on May 5, “Last year, the government imported $2 billion worth of gasoline to meet the country’s needs, which it is likely to do the same this year.”
The statements made by the Oil Minister and this parliamentary figure suggest a resolute stance by the clerical regime in favor of utilizing petrochemical-derived gasoline.
The production of gasoline from petrochemical sources began approximately 12 years ago. Following the embargo on gasoline exports to Iran in 2010, the government of Mahmoud Ahmadinejad turned to petrochemicals as an alternative to traditional gasoline production. This petrochemical-derived gasoline, essentially octane boosters or reformulated gasoline, was manufactured by companies such as Shazand, Jam, Barzumiyeh, Amir Kabir, Bandar Imam, and Bou Ali Sina.
#Iran News in Brief
A state official at the regime's Air and #ClimateChange Center: “Last year, #AirPollution killed about 21,000 people and caused 11 billion dollars in damage to the country. About 6,000 deaths have been reported in Tehran.”https://t.co/NIsUxDO0lJ pic.twitter.com/jPQLuuQ9nU— NCRI-FAC (@iran_policy) August 30, 2022
While this initiative appeared to address the challenges posed by the gasoline embargo, it resulted in significant drawbacks. Despite starting during Ahmadinejad’s tenure, the utilization of petrochemical gasoline persisted well into Hassan Rouhani’s presidency.
In 2012, warning against the government’s plan to produce gasoline from methanol, Ahmad Nematbakhsh, the Secretary of the Automobile Manufacturers Association, said, “Using gasoline with 35 percent methanol production method carries the risk of blindness.”
In January 2014, referring to the daily increase of 22 deaths in Tehran, Rahmatollah Hafezi, the head of the Health Committee of Tehran City Council, said, “Petrochemical fuel creates 35 times more benzene pollution in the air than normal, and after the production of petrochemical fuel, we witnessed that cities like Qom and Kashan were also polluted.”
On March 23, Jalil Salari, the CEO of the regime’s National Refining and Distribution Company, announced gasoline production in the country without mentioning details, stating a daily output of 104 to 112 million liters. The Ministry of Oil and its affiliated organizations have also suspended the publication of statistics for a long time.
According to reports on the activities of gasoline-producing refineries last year, Lavan Oil Refinery produced 742 million, Tabriz Oil Refinery 925 million, Tehran Oil Refinery 1,68 billion, Bandar Abbas Oil Refinery 3,12 billion, and Isfahan Oil Refinery 3,34 billion liters of gasoline. The total production of the five refineries has decreased by about 3 percent compared to 2022.
#Iran News: #Afghanistan Returns Iranian Exported Gasoline Over Quality Concernshttps://t.co/GJgfJ5d8Mh
— NCRI-FAC (@iran_policy) April 20, 2024
The latest statistics on gasoline production at the Shazand Oil Refinery in Arak date back to 2022, which amounted to 3,74 billion liters. The statistics for gasoline production at the Abadan Oil Refinery date back to 2021, which amounted to 1,96 billion liters. And ultimately, Iran’s main gasoline producer, namely the Persian Gulf Star Refinery, which has not updated its statistics since 2021, has produced over 9 billion liters of gasoline in 2021.
The total of these figures amounts to approximately 24.57 billion liters, which falls short by roughly 20 billion liters compared to the nation’s annual consumption.
The performance report from five refineries confirms Hajibabaee’s statement about the failure to export gasoline in 2023. However, he questioned the whereabouts of the two billion dollars worth of gasoline imported last year. These imports, totaling $66.204 million, constitute about 3 percent of total imports.
Both the Ministry of Oil and the National Distribution Company have ceased publishing statistics, making it challenging to verify the claim of two billion dollars worth of gasoline imports. While Hajibabaee claims two billion dollars worth of gasoline was imported last year, Nasser Ashoori, the Secretary of the Employers’ Syndicate of the Refining Industry, contends it was three billion dollars.
#Iran News in Brief
Jalal Rashidi Kuchi, a member of the regime’s parliament, expressed concerns about the consequences of raising #gasoline prices, stating, “Fundamentally, our approach to gasoline has been wrong. Even now, if we tamper with gasoline prices, people will take to… pic.twitter.com/hT5DpjIEU2— NCRI-FAC (@iran_policy) August 23, 2023
Hajibabaee asserts that two billion dollars worth of gasoline should be imported in 2024. Yet, the new year’s budget bill reveals imports of $4.1 billion worth of gasoline for the current year. This variance remains unresolved due to the lack of accessible data, including customs records.
Producing gasoline from methanol in Iran’s current situation appears to serve multiple objectives simultaneously. Petrochemical companies, established in the 2010s, have significant stakeholders, including pension funds as well as semi-private and state-affiliated entities. The surplus methanol production in these petrochemicals, which exceeds the country’s needs by 14 times, can be lucratively sold to the Raisi government as gasoline.
Additionally, refinery gasoline, which faced a complete export halt last year, can be reintroduced into the export market. However, given the skepticism of most countries, including neighboring Afghanistan, towards the regime’s exported fuel, it’s likely that the Iranian populace will bear the brunt of the clerical regime’s detrimental policy decisions.