Khorasan Petrochemical Company (Public Joint Stock) announced the issuance of a new decree by the Cabinet regarding the organization of urea fertilizer supply and distribution. This decision was made to improve the sales process, manage the distribution network, and the financial status of urea fertilizer producing companies.
Details of the New Decree
According to the provisions of this decree, the Ministry of Agriculture Jihad is required to collaborate with the Employers' Association of the Petrochemical Industry to supply urea fertilizer to the distribution network at a base price that will be announced weekly on the Iran Commodity Exchange. This mechanism aims to increase transparency in transactions and improve the sales process.
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The distribution of urea fertilizer will be carried out by the Agricultural Support Services Company, the Central Organization of Rural Cooperatives, and non-governmental intermediaries using the distribution capacity. The goal of these changes is to deliver urea fertilizer to farmers based on their needs and in accordance with the cropping pattern.
Changes in Subsidy Payment and Settlement of Claims
One of the significant changes in this decree is the alteration of the subsidy payment method for urea fertilizer. The government subsidy will be provided as a purchase credit and in accordance with the cropping pattern for farmers. This action can facilitate a more targeted allocation of government support resources and ease farmers' access to urea fertilizer.
Additionally, the issue of offsetting confirmed and audited claims of urea-producing petrochemical companies has also been included in this decree. According to the announced provisions, the settlement of these claims will be pursued through the transfer of sellable government assets, the use of Gham bonds, and other financial instruments. This method can help improve the liquidity situation and reduce financial pressures on urea fertilizer producing companies.
Khorasan Petrochemical Company has stated that supplying urea fertilizer on the Iran Commodity Exchange and receiving the product price through this mechanism can lead to increased transparency in transactions and improved sales processes. Furthermore, this decree may assist in facilitating the collection of claims, reducing pressure on working capital, and enabling the use of various financial instruments.
Overall, the implementation of the new Cabinet decree can positively impact the operational conditions of urea-producing petrochemical companies, including Khorasan Petrochemical Company, by creating greater transparency in the supply and distribution chain of urea fertilizer and facilitating the settlement of producers' claims.
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