Iran’s long-standing ambition to expand the role of compressed natural gas (CNG) in its fuel mix is once again in the spotlight—this time driven by shifting market behavior and recent reforms in gasoline pricing.
Despite substantial investment in infrastructure and a notable rise in dual-fuel vehicle conversions, consumption has not kept pace with expectations yet.
Mohammad-Sadeq Azimifar, head of the National Iranian Oil Products Distribution Company, told ILNA Saturday that Iran’s CNG stations currently have a capacity of more than 30 million cubic meters per day, while actual daily consumption stands at roughly 16 million cubic meters. In theory, the system can accommodate nearly double the current use, yet demand has stagnated.
Azimifar explained that although the conversion of vehicles to CNG has increased by nearly 168% over the past year, national consumption has paradoxically declined. The reason, he said, lies not in technology or infrastructure, but in behavioral economics. With gasoline priced between 3 and 5 cents per liter, the financial incentive to switch to CNG, sold at half a cent per cubic meters, has been too weak. “When price differences are insignificant, drivers naturally prefer the convenience of gasoline,” he noted.
Iran has taken steps to improve the appeal of CNG, including reviving the free conversion program and expanding station development. Still, structural limitations remain. As Azimifar pointed out, Iran has one CNG station for every 1,600 vehicles, a ratio that limits access in many regions.
Strategic Value
Complementing these remarks, Saeed Rahman-Salari, director of the CNG conversion program, emphasized the strategic value of CNG.
Each cubic meter of CNG, he said, provides “the same energy content as one liter of gasoline,” making it a powerful tool for reducing gasoline demand.
Iran’s production capacity for CNG is around 40 million cubic meters per day, yet less than half of that reaches consumers.
Today, with the government moving the price of gasoline closer to five cents per liter, the economic equation is shifting. CNG—priced at just half a cent per cubic meter—now stands out as a far more cost-effective alternative. This widening price gap could rejuvenate demand, helping Iran curb gasoline consumption, ease pressure on refineries, and reduce emissions in urban centers.
Whether these reforms will be enough to alter consumer habits remains to be seen, but one thing is clear: CNG is re-emerging as a viable, competitive and strategically important fuel in Iran’s energy basket.
