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Reliance sells gasoline to Iran

Private Indian refiner Reliance Petroleum has been making regular shipments of gasoline into Iran since late last year, moving up to 10 cargoes so far of the motor fuel, traders said on Wednesday.

"As far as we can tell, they (Reliance and Iran) have a very loose term agreement for the sale of three to four parcels every quarter, but this is not set in stone," one said.

A Reliance official declined to comment on the company's activities with Iran.

Traders said Reliance was believed to have sold one to two parcels of 95-octane gasoline each month to Iran since August, for a total of eight to 10 cargoes. Each parcel was between 25,000 and 30,000 tonnes. Reliance was planning to sell another two to three cargoes to Iran in the first quarter 2001, with one parcel scheduled for second-half February delivery and two others for March, they said. Price details were unclear.

Reliance, which runs India's largest refinery with a capacity of 540,000 barrels per day, has been exporting gasoline since late 1999, with most exports last year bound for Asia.

Traders said that from January to June 2000, the refiner exported a total of eight 35,000-tonne cargoes of 95-octane gasoline. Exports doubled from July to November.

Iran is one of the top crude exporters but has relied on gasoline imports recently to satisfy growing demand, which cannot be met by domestic refining capacity.

Iranian refining official, Ali Aqababaie, was quoted in the local media in November as saying that Iran was seeking 400 million litres of gasoline by March for domestic consumption.

Aqababaie said Iranians burned 42.6 million litres of gasoline a day in the first seven months of the Iranian year, which starts on March 21.

That demand represented a rise of nine percent from the same year-ago period. Much of it was produced by local refineries, but around four million litres a day had to be imported.

Imported fuel has been heavily subsidised by the government, with only a fraction of the cost passed on to consumers. Iranian motorists consequently enjoy some of the cheapest fuel prices in the world, at the equivalent of about five cents a litre.

Traders said oil-rich Iran had been hit by unilateral U.S. sanctions that have hindered maintenance and development of its refining sector, forcing it to rely on product imports.

It also has to contend with a large number of ageing, inefficient, gas-guzzling cars and lorries.

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