Dalga Khatinoglu, Trend Iran News Service department chief/
In the current Iranian calendar year's budget bill, Mahmoud Ahmadinejad's administration has suggested increasing feed gas prices for petrochemical complexes by four times.
The Mehr News Agency reported on May 27 that although the legislators have rejected the plan, the oil ministry officials believe that the feed gas prices for petrochemical complexes will be increased certainly.
Natural gas is the main feedstock of the petrochemical industry. Currently the Iranian government sells natural gas to petrochemical complexes at the price of 700 rials per a cubic meter (about 3 cent).
The suggestion comes as according to the official statistics of Iran Customs Administration, the country's petrochemical exports in the previous calendar year (which ended March 20) faced 33 per cent decrease compared to its preceding year, falling to 10 billion dollars from the previous figure of 15 billion.
Iran averagely feeds 35 to 40 million cubic meters of natural gas per day to its petrochemical units. The figure accounts for some 6 per cent of the country's total gas production. Iran's gross natural gas output stands above 610 million cubic meters per day.
Based on Iran Customs Administration's figures, Tehran totally exported 32 billion dollars worth of non-oil goods (excluding gas condensates) in the previous year. Petrochemical exports accounted for 10 billion dollars of the mentioned amount, which equals to over 30 per cent of the country's total non-oil exports.
By increasing the prices by 4 times, the petrochemical complexes would buy natural gas at the price of 13 cents.
As the Mehr News Agency puts, even though Iran has the world's second largest reserves of natural gas, the uncertainty of gas price or its high prices has deterred the private sector from investing in the (profitable - beneficial) industry.
In this regard, Mohammad Hassan Peyvandi, and energy expert, told Mehr News Agency that petrochemical complexes are bearing losses due to the high price of US dollar.
He believes that in order to compete with the Persian Gulf states in the petrochemical industry, the government needs to provide the domestic petrochemical complexes with natural gas at the same price of the neighboring countries.
The report says that petrochemical complexes in the Persian Gulf Arab states buy natural gas at the prices of 3 to 6 cents per a cubic meter.
The value of Iran's currency, the rial, declined sharply in the past two years. The rial lost about 40 percent of its foreign exchange value in the previous year.