Iran's gasoline consumption hit an all-time high of around 823,000 b/d on 20 March, the eve of the the Iranian new year, or Nowruz, when Iranians typically travel across country to celebrate with friends and family.
Consumption stood at around 731,000 b/d in the five days leading up to the new year, which was up by 22pc on the 598,000 b/d consumed over the same period last year, according to Iran's oil minister Javad Owji.
"Over the past two years, because of [Covid-19] and the related travel restrictions, we had seen subdued gasoline consumption" he said. "But with the improvement in the Covid-19 situation [in recent months] and the resumption of travel, gasoline consumption has naturally increased."
Consumption stood at 560,700 b/d on 21 March, the first day of the new year, and 712,000 b/d on the following day, according to NIOPDC, Iran's state-owned oil products distributor.
But Owji said he expects demand over the two-week Nowruz holiday period that follows to average around 647,000 b/d, with demand expected to peak on 1 April, the eve of the Sizdah Be-dar festival which marks the end of the Nowruz holiday in Iran.
Domestic demand has rebounded from pandemic lows and has been rising steadily since Iran lifted the majority of its Covid restrictions late last year, to the point that Iran's oil minister warned that the country could switch back to being a net importer of gasoline and gasoil "within two to three years" if domestic consumption continues to rise at current rates.
This has led the government to consider ways to reduce domestic demand, one of which is implementing a new fuel pricing and rationing system.
On the supply side, the government has been talking up plans to raise domestic refining capacity, not only to keep pace with rising demand but also to help the country better navigate periods of sanctions.
The government in September last year announced ambitious plans to raise the country's crude and condensate refining capacity to 3.4mn-3.5mn b/d by 2025, up from around 2.2mn b/d now. But these plans will take several years to come to fruition, if at all.
