No Subsidized Gas for Power Plants

No Subsidized Gas for Power Plants
No Subsidized Gas for Power Plants

The days of producing and exporting subsidized electricity are over, ILNA quoted a deputy oil minister as saying.

"It would be more logical to export at FOB prices in the Persian Gulf rather than offering gas to power plants," Hamid Araqi said. "It simply doesn't make sense to use gas for electricity production and then export the electricity for a fraction of the price of gas."

Araqi insists that power plants must increase the efficiency of production and employ advanced technology for higher output. "Gas must be exported at a reasonable price because of its foreign exchange value," he said

There's no point in wasting gas for electricity unless production costs are low and electricity exports bring more value added and revenues than gas, according to Araqi.

"We offer gas to power plants for free and settle the bills with the state treasury."

Araqi revealed that the ministry of energy cannot afford electricity supplied by the power plants under the present costs and circumstances. 

On export prices, he said, "The price of gas for electricity production and export cannot be made public, but FOB costs in Persian Gulf would help find an average price. After all, power stations will (in the future) have to pay the export price of gas if they want to export electricity."

Iran exports electricity to several countries in the region.