Persian Gulf Star Refinery Forced to Produce Low-Quality Gasoline to Compensate for Fuel Shortage

The CEO of the Oil, Gas, and Petrochemical Investment Company stated that the Persian Gulf Star Refinery has the capability to produce high-octane and super gasoline, but due to "mismatch," it has been forced to produce gasoline with an octane rating of 87 at a lower price. Babak Afghahi mentioned on Sunday, September 16, that the government compelled the Oil, Gas, and Petrochemical Investment Company to produce lower-octane gasoline due to the "gasoline mismatch." He further clarified that the existing equipment at the Persian Gulf Star Refinery possesses the technology and capability to produce high-quality gasoline, even Euro 5 standards, adding, "This issue has caused significant damage and losses to the refinery, not to mention that we have not even been paid for this cheap gasoline." The Oil, Gas, and Petrochemical Investment Company is a subsidiary of the Social Security Investment Company (Shasta). In June of this year, Radio Farda accessed a confidential report from the Ministry of Oil that indicated the Persian Gulf Star Refinery, which processes ultra-light oil (gas condensate), does not produce standard gasoline. The details of this official report show that the Persian Gulf Star Refinery, which has only been operational for a few years, received 422,000 barrels of gas condensate daily in April and produced 37 million liters of regular gasoline with an octane rating of 87, about seven million liters of Euro diesel along with 8.5 million liters of regular diesel and other petroleum products, including mazut and kerosene. The Persian Gulf Star Refinery was built by the Khatam al-Anbiya Headquarters of the Islamic Revolutionary Guard Corps (IRGC) using Chinese technology and was supposed to convert ultra-light and high-quality oil (gas condensate produced from the South Pars gas field) into gasoline and diesel meeting Euro 5 standards. Contrary to the IRGC's contract and Mr. Afghahi's claims, this refinery has only produced a small amount of standard Euro gasoline since its inception, even when Iran did not have a gasoline shortage. For instance, an official document from the Ministry of Oil shows that in 2022, when Iran was a gasoline exporter, the refinery produced 41 million liters of gasoline with an octane rating of 87 and only two million liters of Euro gasoline. The Iranian Ministry of Oil does not explain why, despite over $4 billion in costs and the processing of ultra-light oil, the "Persian Gulf Star" refinery, the largest in the country, produces non-standard gasoline. The Ministry of Oil's report indicates that the share of standard Euro gasoline in the total gasoline production of the country is only 22 percent, while the government adds significant amounts of petrochemical and chemical substances to the gasoline produced by refineries to compensate for the gasoline shortage. The base gasoline production of Iranian refineries is 97 million liters per day, and the government increases this figure to 118 million liters by adding other materials, whereas previously only seven million liters of additives, including octane boosters, were added to gasoline daily. The average daily gasoline consumption in Iran this year is reported to be around 122 million liters, indicating a severe gasoline shortage and fuel imports in the country. Recently, Masoud Pezeshkian, the President of Iran, stated without referring to the poor quality of gasoline produced in Iran, which has been repeatedly rejected by Afghanistan, that there is no logic in buying gasoline at free dollar rates and selling it to the public with subsidies.