Economy, Business And Markets

Big Producers Blamed for Low-Quality Bitumen

Big Producers Blamed for Low-Quality BitumenBig Producers Blamed for Low-Quality Bitumen

Small companies should not be blamed for the low quality of bitumen as it is in fact giant export-oriented companies that are forcing them to produce low-quality bitumen in order to survive, according to Iran Bitumen Commission.

Major bitumen companies have formed a cartel, which effectively prevents smaller firms from having a share in lucrative exports, ILNA quoted Hassan Tajik the head of the bitumen commission on Friday.  

While bitumen is composed of only 6% to 7% of crude oil, amid falling oil prices, there was no drop in bitumen prices and that is due to the poor performance of the giant bitumen producers, Tajik added.

Growing demand for natural gas has decreased the consumption of fuel oil as the basic material of bitumen. This has caused a dramatic increase in the production of bitumen which is another reason behind the surplus and consequently price cuts.

Iran produces 4.5 million metric tons of bitumen per annum, but despite the great potential, there is no supervisory body for the oil-based material neither in production nor in market sectors. Energy analysts criticize the government organizations including the National Iranian Oil Refining and Distribution Company for their failure in regulating the bitumen market. Over the past year, the low quality of Iranian-made bitumen has repeatedly been criticized by a few importing countries.