Gasoline Consumption Growth Turns Negative in Iran

A package of strategic fuel-demand management measures has driven the country's gasoline consumption growth into decline for the first time since the COVID period. The measures include adjusting the third-tier gasoline price, regulating station emergency cards in 11 border provinces, replacing 2 million cubic meters per day of gasoline with CNG, and intelligently monitoring fuel supply in the capital by attaching identifiers to station emergency cards. The latest statistics from the National Iranian Oil Refining and Distribution Company (NIORDC) show a sharp turnaround. In previous years, annual gasoline consumption growth averaged 6%, driven by the steady arrival of brand-new cars, the slow retirement of old vehicles, shifts in the fuel mix, and waning interest in CNG. In 1405 (March 2026–27) growth fell to zero. This Aban (22 Ocober- 21 November), it came in at negative 2%, the first time since the COVID era that the country's fuel consumption balance has entered a downward phase. In recent years, the imbalance between the production and consumption of petroleum products, gasoline in particular, had become one of the energy sector's main challenges. If it had continued, it would have set off serious alarm bells for the national fuel distribution network. The government and the Oil Ministry therefore rolled out a set of price and non-price measures to rein in demand and bend the consumption curve toward negative growth. The aim was to close the channels of waste, revive the fuel basket, and bring station emergency cards under control.

Third-Tier Price Adjustment Cuts Consumption by 11 million Liters

The first measure was a gradual, phased adjustment of the third-tier gasoline price. The effect was visible within days. National fuel consumption had hit a record 144 million liters per day in the first 16 days of Shahrivar. After the price adjustment in the second half of the month, it dropped by 11 million liters to 133 million liters per day. That saved more than 160 million liters of gasoline in just 15 days. The reduction came at the peak of summer travel and gasoline demand, at a time of fuel imbalance. Besides stabilizing the distribution network, it eased the heavy operational pressure on the country's refineries.

CNG Consumption Up 15%

With the price change and the sharp, fast drop in gasoline consumption, the economic advantage of clean-burning CNG was restored for consumers. Figures show that daily CNG consumption rose 15% after the third-tier adjustment, an increase of about 2 million cubic meters per day. Since one cubic meter of CNG is equivalent to one liter of gasoline in the combustion cycle, this directly prevents 2 million liters of gasoline from being burned daily in the country's transport system. The public's embrace of CNG after the free-market price increase is a strategic step toward reviving existing capacity. In 1399 and 1400 (2020–2022), CNG consumption had reached nearly 24 million cubic meters per day. But the long-frozen gasoline price eroded the economic case for drivers. Consumption fell to about 15 million cubic meters per day, despite untapped capacity of 35 to 40 million cubic meters per day. Today, more than 2,500 standard CNG stations operate nationwide, and connecting less-served areas such as southern Kerman and Sistan and Baluchestan has widened access to the fuel. About 4.3 million factory-built and workshop-converted dual-fuel vehicles are on the road, with one CNG station for every 1,600 vehicles. This indicates the technical infrastructure is adequate to meet new demand.

Organizing Fuel Distribution in Border Provinces: Emergency Cards Withdrawn, Third-Tier Quota Credited Directly

The second operational focus was high-risk border provinces, with the goal of preventing organized fuel smuggling. Earlier approaches simply collected station cards all at once, which caused crowding at gas stations and long queues. Under a decision of the Article 8 Working Group, an alternative model was drawn up. Emergency cards were withdrawn from stations, and the third-tier quota was credited directly to applicants' personal smart fuel cards. Motorists can still fill up freely without delay, and every transaction is recorded. The scheme was first implemented in Kerman Province in Mordad, then in Sistan and Baluchestan from the start of Shahrivar. After the mechanism proved effective, it was extended to South Khorasan at the start of Mehr. From the start of Aban it was extended to eight more provinces: Hormozgan, Yazd, East Azerbaijan, West Azerbaijan, North Khorasan, Razavi Khorasan, Ardabil, and Kurdistan. Substitute CNG use rose significantly in these provinces, and gasoline consumption fell as a result.

Attaching Identifiers to Station emergency cards in Tehran

An analysis of fuel consumption details shows that about 60% of refueling is done with car owners' personal smart cards. The other 40% uses the free and emergency cards kept at stations, which are the main source of fuel diversion. A pilot scheme to attach identifiers to station emergency cards was therefore launched in Tehran, under the sixth strategy of a Cabinet resolution. Its goals are to prevent fuel smuggling, improve statistical transparency, and close the gap left by distributing gasoline daily without identity monitoring. Under this method, a person first swipes a valid bank card at the terminal. After identity verification, they select the desired amount, from 10 liters up to the 25-liter cap in Tehran, and enter the bank card PIN. The device then issues a receipt carrying a code (token/voucher). The motorist obtains an emergency card from the station attendant, enters the four-digit code printed on the receipt at the nozzle, and fills up. The pilot in Mehr cut average daily gasoline distribution in Tehran from 20.7 million liters in Mehr 1404 to 20 million liters this Mehr. That saved 20 million liters of gasoline in the capital over one month. The scheme now operates at 248 fuel stations in Tehran. Results showed that more than 40% of all refueling and misuse involving free cards was carried out by only 16% of users. In some cases, 70 to 104 monthly refueling transactions were recorded for a single vehicle's license plate.

Curbing Gasoline Consumption Growth Through Targeted Pricing and Non-Price Discipline

The rapid containment of gasoline consumption and the 2% negative growth this autumn show that bending the demand curve without shocks depends on combining targeted pricing tools with non-price discipline in the distribution network. The third-tier price adjustment, the direct transfer of station free-card quotas to personal cards in 11 provinces, the revival of CNG capacity with 2 million cubic meters per day replacing gasoline, and intelligent monitoring of fuel supply in the capital through identifiers on free cards together closed off much of the artificial demand and the leaks through which fuel was diverted. This eased the heavy pressure on the country's refineries and restored a stable balance between fuel production and consumption. - Shana