How much uncertainty was there in the approval of industrial feed rates/petrochemical gas feed price floor?

According to Tejarat News, according to the new amendment, the base rate of gas feed for petrochemical units until the end of the seventh development plan has been set in such a way that the price of gas in the designated market does not fall below fifty thousand (50,000) rials, and the export price of Iranian gas from the average of the previous month. Do not exceed.

Also, the gas feed rate of methanol production units should be set equal to 95% of the base rate, subject to the settlement of the feed price within 30 days after receiving the invoice.

Also, the gas fuel rate of petrochemical units, refineries, pump houses and steel recovery units (excluding blast furnace units) is equal to 60%, metal production units (including blast furnace recovery units) is 45%, cement production units is 15% and other industrial units is 10% rate. The gas feed base of petrochemical units is determined.

It should be noted that two other clauses have been added to this decree, according to which, in order to regulate the market of engine oil, detergents, beverages and textile industry, the base price of Lubcat base oil, alkylbenzene, linear polyethylene terephthalate and polystyrene in the commodity exchange is determined by a working group. It will be adjusted from the Ministries of Oil, Mining and Trade and Economic Affairs and Finance through adjusting the price of feed received by the producers of these products. The base price of consolidated supply is excluded from the implementation of this clause.

Also, the natural gas tariff for tourism facilities and handicrafts licensed by the Ministry of Cultural Heritage, Tourism and Handicrafts is calculated and collected similar to the tariff of 1401. But do these reforms and changes mean determining the floor for the gas feed rate?

The floor price is not 5 thousand tomans

Valid Hilalat, the senior capital market analyst, has stated that according to the new reforms, the gas price floor is not in the formula of 5000 Tomans.

In this regard, he said: the price of gas in the determined market means the average of four foreign hubs. The resolution states that the average price of these four hubs should not be less than 5000 Tomans, which is 28500 Tomans equivalent to 17.5 cents. Now this number is 23 cents; Therefore, let’s note that the price of feed gas can be less than 5000 Tomans, but the global four hub sector cannot be below 5000 Tomans, it will not be.

According to Helalat, the dollar rate for the exchange of this sector will be equivalent to the basic gas rate of the commodity exchange; From this point of view, the present formula affects all the industries of the country, and finally some companies sell products in the commodity exchange, and of course, the price of food and products will be the same.

This senior analyst of the capital market explained in this regard: the price ceiling considering that Iran’s export rate to neighboring countries is a high number, we must say that the output of this formula is always a number lower than the ceiling of Iran’s export price, unless Iran’s export price is meant The price is at the place of production.

Hilalat has concluded that the gas price floor in the formula is not 5000 tomans and this is a wrong interpretation of this text. Also, from exempting some other industries in paragraph 3, it is inferred that the basis of the commodity exchange will be 38,500 dollars.

There is no price floor for petrochemical feed gas

Hassan Kazemzadeh, another senior analyst of the capital market, also said about the uncertainties of the new approval of the petrochemical feed rate: the text of the new approval of the government board regarding the gas rate indicates that the price of gas in the market cannot be lower than five thousand tomans and Iran’s export gas should be more.

He explained about this: The gas rate formula approved in 1994 has main components; The price of natural gas is determined in the market and has an average price of domestic, export and import, each of these two components has 50% weight. According to the decree, the price of natural gas is determined in the market (which is the average of four international hubs) and cannot be less than five thousand tomans. Many mistakenly thought that the output of the formula means that the final rate of gas feed cannot be less than five thousand tomans, while this is wrong.

Kazemzadeh stated: The rate of five thousand tomans for the price of natural gas has been determined in the market, which means that with a dollar of 38,000 tomans, the average of international hubs should not be less than 13 cents. We know that the average of international hubs has always been higher than this number even before the gas crisis in Europe.

This capital market analyst has also concluded that the feed rate of petrochemical gas can be less than five thousand tomans and has no floor. This is the price of natural gas that is determined in the market and has a floor and a ceiling.

Read more reports on the capital market page.

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