At the start of the 14th government, NIORDC faced exceptional conditions, including a significant decline in strategic gasoline and power plant diesel reserves, imbalances between production and consumption of petroleum products, and simultaneous pressure on distribution networks and power plants. These challenges posed serious risks to the stability of fuel supply.

In response, the company adopted a strategic shift from a traditional supply-driven policy to demand management. A comprehensive plan was developed focusing on maintaining and increasing production, upgrading product quality, optimizing consumption, expanding infrastructure and balancing regional reserves. The approach not only addressed shortages but also paved the way for long-term energy stability.

Higher Production, Better Fuel Quality

One of the key steps in reducing the fuel imbalance was stabilizing refinery capacity and maximizing utilization. Crude oil and gas condensate feedstock to refineries rose 4% to about 2.37 million barrels per day, enabling fuller use of refining capacity.

Alongside higher feedstock intake, gasoline production increased sustainably by 3%, equivalent to 3 million liters per day, while diesel output rose 4%, or about 4 million liters per day. The increases helped ease product imbalances and reduce pressure on distribution networks.

Targeted investments also focused on fuel quality. Refinery quality upgrade projects worth $875 million were completed at the Abadan, Shiraz and Isfahan refineries. The projects boosted production of Euro 4 and Euro 5 standard gasoline and diesel, improving fuel quality and delivering environmental benefits.

To maintain stable output, 22 refinery units underwent major overhauls, and several key projects were brought online ahead of schedule. These measures stabilized refining capacity and reduced the risk of production disruptions.

Demand Management and Energy Optimization

With production rising, demand management became a critical complement. As a result, diesel imports were eliminated this year, while diesel consumption declined by about 4 million liters per day.

Gradual reforms to gasoline pricing and the subsidy system reduced the share of fuel dispensed via station-issued free cards from 43% to 25%. The growth rate of gasoline consumption was cut by 50% compared with the previous three years, reflecting the effectiveness of demand management policies without disrupting the distribution system.

The compressed natural gas (CNG) sector also recorded notable growth. Through the repayment of $44 million in contractor claims via gas-saving bonds, factory production, workshop conversions and replacement of aging cylinders expanded, increasing CNG output by 46%.

The shift helped curb liquid fuel use, contributing to an 11% drop in liquefied petroleum gas consumption and a 1% decline in non-power plant diesel use, while improving overall energy efficiency.

In the power sector, diesel deliveries to power plants rose 46%, playing a key role in maintaining grid stability, particularly during peak demand periods. A $500 million fleet modernization package was also introduced, supported by diesel-saving bonds.

Infrastructure Expansion and Balanced Reserves

To reinforce fuel distribution stability, more than 1,000 kilometers of new crude oil and product pipelines were commissioned across the country. The routes included Bandar Abbas–Rafsanjan, Sabzab–Shazand, Tabriz–Khoy–Urmia, and a feedstock branch line to the Bandar Abbas refinery.

Additionally, six power plants were connected to pipeline networks, significantly reducing risks associated with liquid fuel transport and potential diversion.

Power plant diesel reserves reached 4.3 billion liters at the start of the winter fuel period — a historic record. Average daily diesel deliveries during winter 1403 increased 51% year on year. Meanwhile, 421 million liters of low-sulfur fuel oil were distributed to selected steam power plants, ensuring winter readiness.

Human Capital, Innovation and Digital Transformation

Beyond operational measures, NIORDC prioritized human capital development. Improvements to compensation systems, implementation of succession planning, and the establishment of a development and assessment center strengthened workforce skills and competencies.

In innovation, the process of establishing a corporate venture capital (CVC) fund is in its final stages. At the same time, digital transformation initiatives and deployment of a dedicated business intelligence system have brought 50% of the refining and distribution value chain under smart system coverage, enabling more data-driven decision-making.

Overall, NIORDC’s performance under the 14th government indicates that the combined strategy of higher production, improved fuel quality, demand management, infrastructure development and balanced reserves reduced the energy imbalance and reinforced the stability of Iran’s fuel and electricity networks.