Azerbaijan, Baku, Nov.21/ Trend
On Tuesday, the Iranian parliament (Majlis) rejected a single urgency bill on bartering crude oil for bitumen. The bill envisaged allocating one billion dollars towards developing projects through bartering crude oil for bitumen.
The government would provide refineries with crude oil free of charge and then they also supply bitumen production units free of charge with their raw materials through processing the crude oil, according to the Mehr News Agency.
Bitumen producers would deliver their products free of charge to the Ministry of Roads and Urban Development in order to be handed over to contractors as paying the government's debts.
The Majlis has rejected the bill after the administration had been implementing the bartering plan for about two months.
According the current year's budget act, the development budget is around 400 trillion rials (some $33 billion), of which 10 trillion rials (some $825 million) has been allocated to procuring bitumen for development projects.
MP Gholamreza Taj-Gardoon spoke in favour of the bill, saying that just 100 trillion rials of the planned 400 trillion rials development budget has been allocated. So, there is no sufficient budget for allocating a special sum of around one billion dollars to bitumen purchases, according to ISNA.
Another MP Ahmad Tavakkoli speaking against the bill said that the total development budget is 400 trillion rials, but just one tenth of the budget has so far been allocated.
"So, what is the benefit of paying one billion dollars for purchasing bitumen?" he asked.
On Tuesday, Mehr quoted Hamid Hosseini, a member of the union of oil products exporters as saying that bartering bitumen for crude oil has not only led to a rise in the smuggling of bitumen, but also to the loss of 500,000 tons of bitumen in development projects.
According to him, some three million tons of bitumen is consumed in Iran annually, while the amount required is much less.
Each year, some 500,000 tons of bitumen is lost in Iran without being used in any development project, he said.
Many development projects have been halted, he said, adding that the cold season will reduce development activities to a great extent.
"The question is why the government intends to turn one billion dollars' worth of crude oil into bitumen instead of exporting the crude oil? "Hosseini asked.
"One ton of bitumen is sold at around 6.7 million rials (some $545) in the domestic market, while it is priced at over 11 million rials (some $900) in neighbouring countries," he concluded.