Iranian Petchem product prices rise sharply

Baku, Azerbaijan, Feb. 24

By Khalid Kazimov - Trend:

Iranian petrochemical companies have increased the prices of their products just a few days to the end of the Iranian-calendar fiscal year (Mar. 20).

This comes after prices for energy carriers were also increased through decisions made by the government for its next year national budget despite drastic decline in oil prices in global markets.

"We don't have ample tools to control the prices for material supplied by petrochemical companies," said Ruhollah Vahid Kiani, a senior official at the Iranian National Petrochemical Industries Company, Mehr news agency reported Feb. 24.

He noted that the country's petrochemical companies have all been privatized and the government no longer has any tool to control prices.

Providing comments on the causes behind the rise in prices, he said that petrochemical companies revised their prices after they rejected to abide by a pricing formula given by the Complementary Petrochemical Industries Development Office.

According to the official, the companies had announced that they would refuse to offer their products through the Iranian Mercantile Exchange under that formula.

The huge share of the petrochemical industry in Iran's $156-billion worth capital market (1 USD/31,000 rials, based on open market exchange rate) demonstrates the importance of petrochemical industry in Iran's economy.

During the current year Iranian calendar year (started on March 21), the petrochemical units faced an index drop at the capital market, due to uncertainty in getting the crude oil and gas price set for them by the government.

Iranian government was supposed to revise the oil and gas prices for petrochemical units several months ago, but no decision has been made as yet. This imposes a big threat on Iran's petrochemical sector, as the global oil price has been driven down sharply.

Edited by CN