Low diesel price challenging Iran’s transport reforms

Baku, Azerbaijan, July 23

By Dalga Khatinoglu – Trend:

Low diesel price is challenging the country’s transportation reform plans, Deputy Minister of Road and Urban Development, Davoud Keshavarzian said July 23.

According to him, the gas oil price in Iran is less than 10 cents per liter and there is not any courage for renewing 55,000 trucks operating more than 35 years old, Shana reported.

He added that Iranian government has approved $2.7 billion plan to renew 65,000 trucks, but while the diesel price is very low, the owners of old trucks wouldn’t replace them with new trucks.

According to an official document, prepared by the Oil Ministry and seen by Trend, Iran is producing about 93,071 cubic meters per day of diesel, equals about 585,420 barrels per day.

During last fiscal year, ended March 20, Iran exported 290,000 b/d of oil products, of which a third was diesel.

Keshavarzian said that reviewing the transport fleet is very important for Iran because of ecological issues.

According to the Oil Ministry’s official statistics, the country is producing about 602 million tons per year of CO2, of which the transportation sector shares 25 percent.

• Official statistics of oil ministry for 2015

Iran has a $200-billion plan to optimize the energy consumption in the country, especially in curbing flaring, renewing urban transport, enhancing efficiency of power plants, etc.

Iran also plans to improve rail transport system to economize 13 billion litres per year of gas oil demand.

According to the International Energy Agency, Iran’s energy intensity index is one of the highest in the world and double the world average, and has been rising on average by about 3.4%/yr over the past 40 years.

Energy intensity measures the amount of primary energy supply a country needs to generate a unit of gross domestic product (GDP).

The figure for Iran is 0.9 million tons oil equivalent to create $1000-worth of GDP, which is nine times more than Japan and Germany.