Mohammad-Sadeq Azimifar emphasized that the red line for the refining sector under the 14th government administration is any reduction in gasoline octane levels.

“In recent years, five 300,000-barrel-per-day refinery projects were proposed, but they have only progressed by an average of 3 percent. These projects require more than $20 billion in investment. Therefore, we’ve decided to focus on just one of these 300,000-barrel projects and a single petro-refinery to ensure their completion,” said Azimifar, CEO of NIORDC.

He added that since the beginning of the 14th administration, the company has identified 24 key and high-priority projects, particularly in production and distribution, which have already made significant progress. “Our focus is to finish these projects and avoid launching new initiatives without real progress. Completing unfinished projects is our top priority,” he said.

In an interview with Shana, the Iranian oil and energy news agency, Azimifar acknowledged the hard work of NIORDC employees during the cold and challenging days of 1403. “There’s a public perception that liquid fuel wasn’t delivered properly and that power plant reserves were empty. However, the usable storage capacity of power plants is about 3.3 billion liters. In 1403, these reserves were filled and emptied nearly four times. So, the issue wasn’t a lack of delivery—rather, it was excessive consumption of diesel fuel,” he said.

Azimifar, who also serves as deputy oil minister, described fuel smuggling as a long-standing and serious issue in Iran. “The root of fuel smuggling is the price gap. For example, diesel is sold domestically for 300 tomans per liter, but across the border, it trades for 100,000 to 110,000 tomans. No business is more profitable than fuel smuggling. While we can’t eliminate it entirely, we’re actively working to reduce it to a minimum,” he said.

He also noted that nearly 53 percent of the country’s vehicles and over 90 percent of motorcycles are outdated, consuming up to three times more fuel than newer models. “The imbalance in gasoline and diesel consumption is a major challenge. The Seventh Development Plan has set daily consumption targets of 129 million liters of gasoline and 130 million liters of diesel. To manage this imbalance, we must pursue three strategies simultaneously,” Azimifar said.

The Shana interview with Azimifar began with a discussion about navigating the difficulties of the past winter, continued with the country’s energy imbalances and fuel consumption, and concluded with the issue of fuel smuggling and the company’s strategic roadmap for 1404. Here follows the interview:

What challenges did the NIORDC face during the cold winter of 1403? 

The winter of 1403 was particularly tough due to reduced reserves and harsh weather. At the start of the 14th administration, we anticipated fuel supply challenges, especially in December, as power plant reserves were 43% lower than the same time in 1402—800 million liters less. Fuel reserve management should begin early in the year to avoid such shortfalls.

What measures were taken to overcome these challenges? 

We focused on boosting refinery production and stockpiling fuel. Diesel production increased from an average of 111 million liters per day in the first five months to over 120 million liters. We also enhanced fuel delivery infrastructure, including pipelines, rail tankers, and road tankers, particularly to northern power plants.

Was a specific project launched to assist with fuel transfer?

 

Yes. In November 2024, we launched a 460-kilometer pipeline from Bandar Abbas to Rafsanjan, which now transfers 15 million liters of product daily to the north. Additionally, we added 3,000 to 4,000 transport vehicles to boost delivery capacity.

How much liquid fuel was delivered to power plants in 1403? 

Over 22 billion liters—40% more than in 1402. Although public perception suggests power plants ran out of fuel, this was due to overconsumption of diesel. We filled and emptied the 3.3 billion-liter-capacity tanks about four times during the year.

What steps were taken to improve fuel quality in 1403? 

Our top priority is to not lower the octane number of gasoline. We halted permits for lowering octane and focused on producing high-quality fuel. Gasoline output rose from 97 to 105 million liters daily by optimizing existing units and increasing crude input by 100,000 barrels per day. Euro 4 and 5 fuel production also increased.

Were there any notable projects launched in 1403 to boost fuel quality?

Yes. The Abadan refinery’s hydrocracker unit began operating, adding 4 million liters/day of Euro 5 diesel. The Shiraz refinery’s isomerization unit also started, upgrading all gasoline output to Euro 5 quality—without major investments, just improved efficiency.

How did this increased production affect the economy?

Without the additional production, we’d have needed to import gasoline and diesel, costing around $1.7 billion over six months. The savings resulted from strong coordination across the oil sector.

What are your priorities in fuel production projects?

We’re focusing on high-progress, low-cost projects. Of the five 300,000-barrel projects launched previously, progress was only 3%, needing over $20 billion investment. So we’ll prioritize one 300,000-barrel project and one petro-refinery.

How are you addressing fuel imbalance and overconsumption?

Nearly 53% of vehicles and over 90% of motorcycles are outdated and consume up to three times more fuel. We follow a three-pronged strategy: 

1. Complete development projects 

2. Optimize and manage consumption 

3. Prioritize based on limited financial resources

What non-price solutions are being used to control fuel use?

We’ve addressed falling CNG use (down from 24 to 18–19 million m³/day), which shifted 5 million liters/day of demand to gasoline. By issuing energy-saving bonds, we revived the stalled project to convert single-fuel public vehicles to dual-fuel.

Are there plans to modernize the aging fleet?

Yes. The 7th Development Plan mandates scrapping 500,000 outdated vehicles. We’re working with the Ministry of Industry to draft a major fleet renovation plan, funded by fuel-saving revenues.

What are your fuel delivery plans for power plants in 1404?

We plan to boost reserves early in the year, continue increasing diesel production, and strengthen logistics to maintain steady delivery through winter 1404.

How will you address the fuel supply imbalance in 1404?

With daily targets of 129 million liters of gasoline and 130 million of diesel, we’ll focus on increasing output, reducing consumption growth, and prioritizing high-impact projects. We’ve identified 24 key ongoing projects to complete, avoiding new, unproductive ones.

What are the priority projects for 1404?

 

- Adish Refinery (60,000 barrels/day, private sector) to launch in spring 1404 

- Mehr Khalij-e-Fars Refinery Phase 1 (120,000 barrels/day) 

- Shiraz Refinery Diesel Quality Upgrade to Euro standard early in 1404 

- Tehran Refinery Gasoline Upgrade to Euro 4 & 5 by end of 1404 

What infrastructure developments are planned for product transfer?

Nearly 1,000 km of pipeline was completed by the end of 1403. In 2025, we’ll inaugurate another 1,000 km—worth over $800 million—including: 

- Bandar Abbas–Rafsanjan pipeline 

- Sabzevar–Rey pipeline 

- Power plant fuel delivery lines 

What’s the purpose of linking fuel quotas to bank cards?

The 1404 budget law mandates implementing a bank card-based fuel system by summer. It’s a complex system involving banks, law enforcement, cybersecurity, and the Oil Ministry, aimed at better fuel monitoring and distribution.

Interview by

Negin Salimian