Six reasons why Iran should use compressed natural gas for vehicles

Posted on January 17, 2013


dual-fuel-carsThe use of natural gas in vehicles in the world has been increasing, and one country that could benefit big from natural gas-run vehicles is Iran.

According to the Natural Gas Vehicle Organization, the number of NGVs (natural gas-fueled cars) in use worldwide by the end of 2011 had grown to 15.2 million.

Some forecasts say global NGV sales can reach as much as 19.9 million vehicles by 2016. NGVs have been most successful in the Middle East and Latin America, especially so in countries that lack a high capacity to refine oil.

Enter Iran, which is being hit by sanctions left and right, and it is getting more and more difficult for the Islamic Republic to import gasoline.

In recent years, Iran has been investing money in dual-fuel cars, those that can run on gasoline and natural gas.

According to Iranian media sources, there were about 78,000 dual-fuel cars in Iran back in 2005, and now this figure has grown up to some 2.5 million cars.

Due to subsidy reforms in the country, the price difference between CNG (compressed natural gas) and gasoline was not that big, so the trend of producing and buying dual-fuel cars instead of traditional ones, has dropped down.

Due to Iran’s complex currency system, with two currencies, and different freign currency rate (official rate and free market rate), the price of CNG is changeable.

If CNG is counted by cubic meters, then its price is about 300 Tumen (25 cents by official rate) per one cubic meter, however if counted by liters, the price would be 405 Tumen (some 33 cents by official rate) per liter.

Iranian media has reported that without use of CNG, the use of gasoline for vehicles accounted to 80 million liters per day, and with inclusion of CNG, this figure dropped to some 62 million liters.

Iranian officials believe that reducing the dependency of vehicles with gasoline, helps to save foreign currency for importing gasoline into the country.

Regarding the CNG, currently, there are around 12 Iranian companies that supply local markets with natural gas. In order for Iran to decrease dependency on gasoline, and use natural gas as transportation fuel, it needs to invest more money on building more CNG fueling stations.

Currently there are only about 1,800 CNG fueling stations in Iran, and this number is planned to be increased to 2,000 – which is still incomparable to the amount of usual gas stations in the country.

The Natural Gas Vehicle Organization has reported that of total NGVs worldwide, Iran accounts for more than 18 percent – holding the first place in the world. For comparison – the U.S. ranks 17th in the world with less than 1% of total NGVs.

There are a number of reasons why Iran in particular would win, if it continues the strategy of slowly increasing the use of natural gas as transportation fuel.

Some of these reasons are:

– CNG is safer than flammable liquid fuel

– Car’s oil to be changed less frequently due to cleaner-burning fuel

– CNG is non-toxic, and more environment-friendly, which is vital for Iran

– Natural gas, which is 90 percent methane, has a much higher octane rating than gasoline, allowing for higher compression ratios and therefore greater efficiency in the engines that use it

– CNG cars are cheaper to run than conventional vehicles

– Iran would unlikely need special permit for NGVs

Today, it is important for Iran to have as much diversification of fuel sources as possible, due to high consumption of gasoline in the country.

With all things considered, to continue developing the use of CNG for vehicles might not be such a bad idea.