The Iranian Investment Institutions Association requested the removal of Clause 7 of the Cabinet's resolution dated October 5 regarding the calculation of the price of feedstock delivered and petroleum products of petrochemical and refining companies in a letter to the Economic Coordination and Supervision Deputy of the First Vice President. This resolution specifically addresses the pricing of feedstock delivered and petroleum products provided to petrochemical and refining companies.
Importance of the Oil Refining Industry
The oil refining industry, with a daily production capacity of 1.8 million barrels in the country, plays a vital role in supplying essential products such as gasoline, diesel, and kerosene. These products not only meet the domestic needs of the country but are also significant for exports. Therefore, the stability and predictability of economic policies in this area are essential for maintaining the confidence of economic actors and strengthening investment.
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Consequences of Implementing Clause 7 of the Resolution
The implementation of Clause 7 of the resolution dated October 5 could create ambiguity in the estimation of future revenues and costs of refining companies. This ambiguity means an increase in investment risk and a decrease in the motivation of economic actors to implement development projects. In fact, the lack of transparency in the pricing of feedstock and products could lead to disruptions in the financial and operational planning of these companies.
Removing Clause 7 could help strengthen stability in the decision-making environment, maintain investor confidence, and create a clearer outlook for the activities of refining and petrochemical companies. Considering that the petrochemical industry is also active with an annual production capacity of 40 million tons in the country, decisions in this area can have widespread impacts on the entire economy of the country.
Ultimately, the Iranian Investment Institutions Association, emphasizing the importance of correct and principled decision-making in this area, has called for a review of this resolution to create a suitable environment for attracting domestic and foreign investments.
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