Oil, gas and Iran economic analyst
President Masoud Pezeshkian’s campaigned on transparency, but his administration is presenting inflated and misleading data about Iran’s energy sector in an apparent bid to soothe public dissatisfaction with deepening blackouts.
In recent months, authorities have repeatedly cited sizeable increases in gasoline and natural gas production and some officials have even assured the public that this summer’s looming electricity shortfall will be resolved.
But a confidential document from the Oil Ministry obtained by Iran International shows these claims are not only inaccurate, but the country's energy shortages are in fact accelerating.
Iran currently suffers from year-round energy deficits. During peak demand season, electricity and natural gas shortages climb as high as 25%, while the gasoline shortfall reaches 30%.
With energy development projects stagnating, officials have turned to optimistic public messaging, using spurious statistics to suggest improvement that their own confidential data shows does not exist.
In late 2024, Mohammad-Sadegh Azimifar, CEO of the National Iranian Oil Products Distribution Company, said the country’s daily gasoline output had increased by 10 million liters, and diesel by 13 million liters over the past year.
However, a confidential internal report from the same company shows base gasoline production at Iranian refineries increased by only 1.5 million liters in late 2024 compared to the same period in 2023. Even for the entire year, the growth was just 3.5% or just 3.76 million liters per day.
Diesel output showed similarly modest growth—just 3% or 3.38 million liters per day for the year. Meanwhile, consumption of both fuels jumped by 7.5% in 2024, or 7 million liters per day, further deepening Iran’s fuel deficit.
Despite the absence of any new refineries in recent years, the government has continued to push over 1.5 million low-efficiency domestically manufactured vehicles into the market annually—adding more strain on fuel demand.
In 2024, Iran’s daily base gasoline production was around 101 million liters, while consumption topped 123 million liters.
Boosting additives
The government’s main strategy for managing this growing gap, according to the Oil Ministry report, has been to dilute refinery-grade gasoline with large volumes of substandard additives.
These additives include various chemical compounds, fuels from petrochemical plants, and the controversial chemical MTBE—a compound banned in many Western countries due to its environmental and health hazards—as well as industrial octane boosters.
While additive use stood at just 5 million liters per day or 6% of total gasoline in 2018, it now exceeds 20 million liters or over 20% of the fuel supply, raising serious concerns about air quality and public health.
The same confidential report also revealed that only one-quarter of gasoline produced in Iranian refineries meets European standards and even within that limited share it is not fully clear whether the fuels truly adhere to required specifications.
Gas production: claims versus reality
The head of South Pars Gas Complex recently announced a 6 billion cubic meter increase in gas fed into the national grid in the last fiscal year, ending on March 20. The South Pars field alone accounts for 73% of Iran’s natural gas supply.
Simultaneously, the CEO of the Iranian Central Oil Fields Company—which provides around 25% of the nation’s gas—said the company boosted production by 10 million cubic meters per day during the autumn and winter, equating to at least 2 billion cubic meters of annual growth.
Based on these statements, Iran should have increased its gas production by at least 8 billion cubic meters last year.
However, international institutions such as the International Energy Agency (IEA) and the Gas Exporting Countries Forum (GECF)—of which Iran is a member—have both estimated Iran's gas output growth at only around half that amount.
From 2010 to 2020, Iran enjoyed annual gas production growth rates above 5%. But from 2021 to 2024 the rate has fallen to around 2% on average. The IEA forecasts that in 2025, gas production will rise by just over 1%.
