The Securities and Exchange Organization has ordered manufacturers listed with the stock market to include data about energy consumption costs in their financial reports.
Companies are required to disclose energy costs in the present fiscal year (started in March) and forecasts for next year by Jan 5. The regulator says the move is in line with its efforts to improve transparency in financial reports of listed companies.
The order comes amid concerns about higher prices for gas feedstock the government will sell to major steel mills as envisioned in the proposed 2022-23 budget.
Concerns are driven by the fact that a steep rise in gas prices for steel plants will eventually undermine their profit and by extension, harm investors.
Steel industries consumes 8.5 billion cubic meters of gas per year. In the present budget, the price of feedstock for steel makers is 30% of what petrochemical companies pay.
In the next fiscal year, however, it has been forecast that steelmakers too will pay the same as the giant petrochemical companies. The decision is estimated to cut 240 trillion rials ($800 million) in steelmakers’ profits next year.
To appease concerns, the regulator said steelmakers can offset the loss in profit “by raising prices for their international customers plus the anticipated rise in forex rates.”
The government has not said anything about raising feedstock prices for petrochemical companies next year.
