Iran’s diesel demand drops by 10% with quota system
An Iranian Oil Ministry official says demand for diesel in the country has declined by more than 10% as a result of introducing a quota system that allocates the fuel to heavy vehicles based on their use.
A deputy head of Oil Ministry’s fuel department (NIOPDC) said on Sunday that demand for diesel as fuel for vehicles had declined by around 7-10 million liters per day in Iran with a full implementation of the new quota system.
Ali Akbar Nejad Ali said that current average demand for diesel in Iran is around 52 million liters, adding that a bulk of the supply is given to vehicles at a heavily subsidized price of 3,000 rials ($0.01) per liter.
Nejad Ali said that under the new quota system, truck and bus drivers are entitled to a fixed ration while they receive an extra amount of the fuel based on the mileage driven.
He said the system has led to a major reduction in diesel smuggling to neighboring countries.
NIOPDC figures show that nearly 690,000 heavy vehicles have been covered by the diesel quota system of which some 430,000 vehicles are traveling between the cities and the rest are operated by municipalities and private owners for delivering intra-city services.
Recent data shows the company supplies only around one million liters per day of diesel at a second subsidized price of 6,000 rials ($0.02) per liter for drivers who have no access to their ration cards.
A similar system used for rationing gasoline in Iran has not been as successful. Recent NIOPDC figures show that gasoline demand in the country has soared to above 110 million liters per day from lows of around 70 million liters per day reported in November 2019 when the system was introduced.
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