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Iran imported 36 percent less gasoline than a year earlier during the first quarter of the Iranian year beginning on March 21 in what may well be a signal the country is shoring up its domestic supply as the start of U.S. sanctions draw near.
Iranian media quoted the managing director of the National Iranian Oil Products Distribution Company as saying that the average daily gasoline imports stood at 5.7 million liters during the first quarter. State news agency IRNA separately reported that the import decline was linked to the start of gasoline production at a new refinery, the Persian Gulf Star Refinery.
A senior executive from NIOPDC’s parent company said Iran imported an average 13 million liters daily of gasoline during the first half of Iranian 2017, but by the last quarter of that year, this had slumped to about 5 million liters daily.
Iran has been forced to import gasoline as a result of the international sanctions that cut its access to equipment and spare parts for refinery maintenance. Refining capacity itself was too low to meet domestic demand for fuels, but reformist president Hassan Rouhani made fuel independence a priority for his government when he came into power, and the construction of the Persian Gulf Star has been a major step in that direction.
Related: Why Natural Gas Hasn’t Dethroned Gasoline
With an initial capacity of 120,000 bpd of crude daily, the refinery is now being expanded to accommodate double that, although the quality of the fuels may not be high enough to meet the Euro 4 standard even though plans are to produce fuel under Euro 4 and Euro 5 standards.
In the face of new U.S. sanctions, it would make sense for Iran to accelerate the expansion to secure adequate domestic supply of gasoline, although amid sanctions consumption could fall. Last year, this averaged 520,000 bpd.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.