Private Sector Urged to Help Repatriate Oil Revenues

Private Sector Urged to Help Repatriate Oil RevenuesPrivate Sector Urged to Help Repatriate Oil Revenues

Private enterprise can help repatriate oil revenues if the oil ministry establishes a system for joint cooperation between the private sector, the oil ministry, and banks which facilitates crude purchases by private entities, head of Iranian Oil, Gas, Petrochemical Products Exporters' Association said, ISNA reported.

As regards purchase of oil, the private sector is required to pay cash in advance or issue a guarantee, which no bank is willing to provide, Hassan Khosrojerdi said. This is while, foreigners are allowed to buy crude on credit or installments.

Banks are reluctant to issue guarantees when it comes to the sales of oil and condensate, because the figures are high. "The private sector should be endowed with the same facilities as foreign customers, in view of the fact that it is difficult for private companies to afford cash purchases or provide hefty bank guarantees."

"No effective measure has been taken in this regard," the official said, adding that the private sector could collaborate with the government to repatriate oil revenues, which are blocked as a result of financial sanctions imposed on Iran. "Currently, the private sector is acting on its own initiative, it organizes its crude exports, and faces no difficulty when repatriating the money," he noted.

Oil revenues held in the treasury's account are handed over to private firms for import of non-oil commodities. Instead, they could have exported oil and imported goods in exchange, Khosrojerdi said, suggesting the likelihood of barter by private entities.

The US imposed tough sanctions on Iran to curb the country's nuclear program which it claims is geared to military use. Iran insists the program is peaceful. Since early 2012, the United States led a campaign to accelerate the pace of sanctions, focusing on the energy and financial sectors. The EU also has imposed sanctions on oil purchases from Iran. Overall, sanctions have sharply cut back oil exports, and isolated Iran from international banking systems.

Iran and the P5+1 group (the five permanent members of the UN Security Council, namely United States, Russia, China, United Kingdom, and France, plus Germany) were unable to reach a comprehensive deal to resolve the 12-year dispute by a November 24 deadline, and gave themselves seven more months to resolve the deadlock.