The hidden gas subsidy in Iran has reached over $672 billion from 1390 to 1403. This figure indicates a heavy cost for the Iranian economy due to the low gas prices, allowing consumers to use this production input without regard to resource shortages.
Increase in Consumption and Decrease in Production
In recent years, the trend of gas production and consumption shows that the gap created by increased supply to meet growing demand has gradually narrowed. In spring 1397, the average gas production was about 604 million cubic meters per day, while domestic final consumption reached about 496 million cubic meters per day. Seven years later, in spring 1404, production increased to about 727 million cubic meters per day, but consumption also rose to about 642 million cubic meters per day.
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Seasonal Changes in Gas Consumption
Changes in the composition of gas consumption throughout the different seasons of the year indicate serious challenges in resource allocation. In summer, the average household consumption is only about 47 million cubic meters per day, while industry and power plants consume an average of about 406 million cubic meters of gas. As autumn approaches, household consumption rises to over 180 million cubic meters per day, peaking in winter when average household consumption reaches about 304 million cubic meters per day.
These changes in consumption not only lead to increased demand but also place more pressure on the gas distribution network. As a result, the network is forced to reallocate resources among different consumer groups.
Considering that the Iranian economy continues to supply gas with a heavy subsidy, the main question is how long this situation can continue and where the costs arising from this hidden subsidy will be sourced from.
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