Economy, Business And Markets

Parliament to Stabilize Petrochem Prices

Parliament to Stabilize Petrochem Prices
Parliament to Stabilize Petrochem Prices

The parliament is currently adopting a resolution based on which petrochemical products will be priced according to global prices, said Ali Salehabadi, the head of Securities and Exchange Organization (SEO).

The resolution will help the petrochemical industry secure long-term contracts, Salehabadi told ISNA, adding that if the government sets the price for example with urea, the companies would be given discounts for feedstock such as natural gas, which would probably be lower than global prices in order to compensate for losses incurred in price differentials.  

The SEO chief also touched upon the obstacles faced by the listed petrochemical companies and refineries to join the stock market. The quality of domestic gasoline is the main issue discussed during the months-long absence of refineries in the stock market. Despite numerous meetings held by the refineries' shareholders, the SEO, and the officials at the National Iranian Oil Refining and Distribution Company, the refineries' ticker symbols still remain closed at Tehran Stock Exchange and also at the Iran Mercantile Exchange (IME).

Another factor making the SEO close such ticker symbols is the lack of transparency in pricing refineries' feedstock. Based on the law, the crude oil supplied to the refineries should be valued on the price of exported crude oil in the same month.

The refineries say the NIORDC forces them to buy low-quality crude oil at international prices. This, the refineries believe, causes technical problems in their facilities while the oil ministry does not take these losses into consideration.

None of the refineries have so far been able to present their six-month financial reports since the current Iranian calendar year started on March 21. This has led to widespread discontent among their shareholders as refineries are still unable to officially announce their gains and losses before the crisis is resolved.