Iran requests P5+1 to remove ban on LPG sales

Photo: Iran requests P5+1 to remove ban on LPG sales / Politics

Baku, Azerbaijan, April 26

By Fatih Karimov - Trend:

Adel Nejad Salim, Managing Director of Iran's Persian Gulf Petrochemical Holding Company urged Iranian nuclear negotiators to request P5+1 to remove ban on liquefied petroleum gas (LPG) sales.

Nejad Salim said that unlike petrochemicals and polymer products, LPG is still on the list of sanctions, Iran's Mehr news agency reported on April 26.

Some six percent of the country's petrochemical products are exported to the European markets, he said.

Iran exported about $3.392 billion worth of LPG in Iranian calendar year 1390 (March 2011-March 2012), but the figure dropped to $2 billion in the next year, according to Iran's customs data.

Exports of propane and butane fell by 31 percent and 18 percent, respectively, in the first eight months of the year 1392, before a nuclear deal between Iran and the P5+1, but rose during the next four months of the year.

In January, Platts (an energy and metals information provider) quoted an EU Council spokeswoman as saying that the EU's six-month suspension of its ban on insurance for shipments of Iranian oil and lifting of curbs on petrochemicals trade does not include natural gas and gas products such as LPG.

"LPG -- as in butane and propane -- is considered gas product by the EU and therefore remains banned under EU sanctions imposed on natural gas and gas products in 2012," the spokeswoman said.

"Only petrochemicals listed in Annex V of the EU sanctions imposed in 2012 are affected by the suspensions."

Industry sources told Platts that LPG, typically considered a petrochemical or refined oil product, is still banned from transports and imports as part of the EU sanctions as it is categorized as a gas product in the EU sanctions list.

Iran exported 1,385 tons of propane, worth $1.212 billion during the last fiscal year (March 2013-March 2014), indicating a 6.68 percent increase in value compared to the previous year, while the butane exports reached 1,159 tons, worth $1.014 billion, indicating a 17 percent increase in value during the mentioned time.

Before sanctions, Iran's yearly propane and butane exports were 2,546 tons ($2.066 billion) and 1,578 tons ($1.326 billion) respectively.

So, Iran's LPG exports indicate a 39 percent decrease in volume and 44.5 percent decrease in value compared to the pre-sanctions level.

Under a six-month interim deal between Iran and the P5+1 group (five members of the UN Security Council plus Germany) which took effect on January 20, the six major powers agreed to give Iran access to its $4.2 billion in revenues blocked overseas if the country fulfills the deal's terms which offer sanctions relief in exchange for steps on curbing the Iranian nuclear program.

Iran and P5+1 intend to continue their talks to reach a final agreement to fully resolve the decade-old dispute over the Islamic Republic's nuclear energy program.

The two sides have held two rounds of political level talks as well as two rounds of expert level negotiations so far.

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