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IPO to Privatize 40 More Gas Stations

IPO to Privatize 40 More Gas StationsIPO to Privatize 40 More Gas Stations

Tenders will be announced Monday for 40 gas stations in 15 provinces following a successful first attempt to privatize 100 gas stations earlier this year.

"In the second round of gas station tenders, 40 stations will be tendered on Monday with a base price of 2.7 trillion rials (around $69.2 million)," said Jafar Sobhani, an advisor to the Iranian Privatization Organization (IPO) which is an affiliate of the Ministry of Economy, IRNA reported.

Markazi, West Azarbaijan, Fars and Tehran have the largest number of gas stations in the new tenders.

The winner(s) will be required to pay 30% of the total sum up front and the rest in installments of between two to four years.

In September, tenders for 100 gas stations across 25 provinces drew 333 bids with a total value of over $112 million. The tendering process marked one of the largest privatization bids in the country whose economy is largely (85%) state-owned.

According to Sobhani, the main reason behind the strong reception for the gas station tenders in September was the 10% reduction in down payment requirement.

“The down payment for past tenders was 40% of the total, but it was reduced to 30% for the gas stations,” he said about the first round of tenders that saw a tough competition for gas stations in 22 other provinces.

The National Iranian Oil Refining and Distribution Company, Iran's monopoly fuel distribution company, says the privatization of gas stations is aimed at improving service  quality and customer welfare. According to reports, privatization of gas stations started five years ago with the launch of 30 CNG stations in Isfahan Province, but failed to gain traction.

Iran has so far kept its retail energy market shut to foreign investors. Last year, reports circulated that Royal Dutch Shell and France's Total had won the rights to own and operate a total of 200 gas stations in Iran, a claim that was promptly denied by government officials.

 

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