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An Iranian official has rejected reports claiming that it will halt exports of fuel oil during the first three months of next year in order to meet domestic power plant demand.

Speaking to Fars News Agency, Farid Ameri, a senior official with the National Iranian Oil Refining and Distribution Company (NIORDC), said “The export of this product [fuel oil] will not be stopped under any circumstance, neither in winter nor in other times.”

The comment follows the publication of recent media reports claiming that Iran would halt spot exports during the first quarter of 2009 in order to meet domestic demand for power generation during the winter season.

The National Iranian Oil Company (NIOC), which typically exports between three and four cargoes of fuel oil per month between January and March, was said to be plannning to only offer spot cargoes if domestic demand weakened.

According to Reuters, a source familiar with the country's fuel export programme had said Iran would not be able to offer spot cargoes because it will need to manage its own requirements for power generation during the winter period.

"We will continue to meet our agreements on our term contracts, and will only consider spot sales if the winter is not severe and the requirement for domestic power generation is less," the source was reported to have said.

Over the previous two winters, Iran has reduced exports of fuel oil due to an increase in domestic consumption. This resulted in exports to the Middle East's major bunkering port, Fujairah, being slashed by up to 60 percent.

Another reduction in fuel oil shipments during the next three months would also have similar consequences for the Middle East bunkering market and push up premiums.

Fujairah is one of the leading bunker ports in the world with estimated volumes of between 13 and 15 million tonnes per year.

China, meanwhile, is also a regular purchaser of fuel oil from Iran for use as refinery feedstock. Demand for fuel oil has risen in recent weeks after it was announced that the consumption tax on several oil products would be increased as part of the government's policy to promote energy efficiency. The decision has led to aggressive Chinese buying ahead of next month's fuel tax hike.

Iran is said to be planning to build five additional nuclear reactors over the next five years in order to meet the country's future energy needs.

The country suffers from electricity shortages, which during the summer led to the implementation of a rationing programme to cope with the issue of domestic demand.