Iranian lawmakers passed a bill during their Wednesday public session based on which the Iran Mercantile Exchange (IME) would be the reference for setting petrochemical prices, reported ISNA on Monday.
With regard to the long process to set the prices for the feedstock for petrochemical units, the parliament decided that the IME be the reference for price discovery so that price setting would be more transparent, said Mohammad Bayatian, lawmaker and a member of the Parliament's industries committee.
Based on the new decision, the buyers of petrochemical products from the IME would be granted government subsidies. The subsidy will be offered to the producers to shield them against market fluctuations, added Bayatian.
Earlier this year, the administration published a special package designed to pull the economy out of recession without increasing inflation. According to the package, the price of commodities and goods to be offered at commodity market and energy bourse should only be set within the IME and the stock exchange (Tehran Stock Exchange).
The government and the parliament seem to have joined hands to resolve this issue, a trend not witnessed much during the former president Mahmoud Ahmadinejad's tenure. This has brought hope to the market and now analysts expect much better days for the commodity market. The experts say the move would reduce the administration's expenditures, would make it possible for the government to more closely monitor the prices and balance the supply and demand in a more efficient manner, and would also increase trade transparency.
The quality of domestic gasoline as well as feedstock prices are the bones of contention and the main reason behind the months-long absence of refineries and petrochemical facilities from the stock market. The refineries' ticker symbols were for months closed at the Tehran Stock Exchange (TSE) and the IME, so they were unable to officially announce their gains and losses. The absence in commodity markets led to a widespread dissatisfaction among the shareholders.
