Confidential report details Iran's struggle to meet fuel demand

A confidential report from Iran’s oil ministry appears to show a widening gap between domestic fuel production and consumption, highlighting growing pressure on the country’s energy infrastructure.

According to the ministry’s confidential annual report obtained by Iran International, diesel consumption in March 2025—the final month of the Iranian calendar year—hit a record 146 million liters per day, exceeding national production by 30 million liters.

The surge was largely driven by a severe and ongoing shortage of natural gas, which forced power plants and heavy industry to burn more diesel and fuel oil (mazut) to meet energy demands.

Diesel use rose 16% year-on-year in March, while production grew by just 1%. Daily mazut consumption also climbed 30%.

Despite holding the world’s second-largest natural gas reserves, Iran has faced persistent shortages since last year, especially during the winter months. The government’s failure to expand gas output has pushed annual mazut consumption up.

In total, Iran consumed 57 billion liters of mazut and diesel in the last year—roughly 1.28 million barrels per day. More than a third was used for power generation while the rest was absorbed by the industrial and transportation sectors.

Barter deals and toxic additives

Gasoline consumption also rose by almost 8% in a year.

To make up the shortfall, the government imported nearly 5 billion liters of gasoline and diesel over the past year, doubling the volume of fuel imports compared to the year before.

With cash and resources constrained by sanctions, Iran has leaned heavily on barter to meet fuel demand—trading part of its mazut exports for gasoline and diesel, particularly with the United Arab Emirates.

The report notes that of the 290,000 barrels per day of mazut exported last year, 40% was bartered for refined fuel, while the rest was sold to the UAE, China and other Asian buyers.

The report also sheds light on gasoline quality, revealing that Iran does not produce any gasoline that fully meets international standards.

Around 80% fails to comply with Euro 4 or Euro 5 benchmarks. The rest, labeled as “Euro gasoline,” contains the petrochemical additive MTBE (methyl tert-butyl ether), which is banned in many countries due to environmental and health risks.

Public spin versus internal figures

Iran continues to blend 2 million liters of MTBE into its gasoline daily.

Refinery output rose by 4.5% to 101 million liters per day, but the government raised that to 121 million by adding 20 million liters of MTBE and other chemical additives—a fourfold increase in additive use in recent years.

In March, Mohammad Sadegh Azimifar, CEO of the National Iranian Oil Products Distribution Company, said diesel output had risen by the equivalent of a 300,000-barrel-per-day refinery and that fuel production had increased by 11% overall.

However, the Oil Ministry’s internal report contradicts these statements, showing actual growth was closer to one-third of what Azimifar posited.

The discrepancy reflects a broader pattern of officials overstating achievements to project control despite mounting evidence that Iran’s energy crisis is worsening.