The country’s oil refining industry is owned by the Social Security Organization!

According to the report of Iran Economist, according to the report of the Majlis Research Center, the Social Security Organization controls 45% of the country’s oil refining industry.

According to the report of the Majlis Research Center on the share of quasi-governmental institutions in the oil refining industry, 99% of the country’s oil refining industry is in the hands of the government and non-governmental public institutions. Among these institutions, the Social Security Organization has the most control and management in the oil refining industry.

The non-transparency of non-governmental public institutions’ information has become one of the most important issues of the country’s policy makers for years. In order to better understand this issue, one should first get acquainted with these institutions and the laws related to them.

In July of 1373, the “Law on the list of non-governmental public institutions and institutions” was approved in the then parliament. In this law, a number of institutions, including the Social Security Organization, are recognized as non-governmental public institutions.

Years later, another law was passed that was related to these institutions. Article 6 of the General Policy Implementation Law, Article 44 of the Constitution states that non-governmental public institutions and their affiliated companies do not have the right to directly or indirectly own more than 40% of any economic enterprise and market, and they must hand over the surplus. Also, they must announce the relevant information to the Competition Council and the Stock Exchange Organization.

Based on these two laws, the performance of non-governmental public institutions can be examined. To what extent these institutions have ownership in economic enterprises and markets is important. This study has started from the oil refining industry, which plays a prominent role in the country’s economy. The contribution of non-governmental public institutions in this industry has been evaluated.

Getting to know the oil refining industry

At the beginning of the work, we should get acquainted with the structure of the oil refining industry:

This industry consists of 10 refineries, 4 of which are non-listed and the rest are listed. Of these 10 refineries, 9 are owned by the government and non-governmental public institutions, and one refinery is owned by the private sector.

Oil refining industry in the hands of 5 public non-governmental organizations

As mentioned, the private sector, the government and non-governmental public institutions have entered this industry and have directly or indirectly been involved in the ownership of refineries. In the following, these institutions will be introduced and the contribution of each of the country’s refineries will be examined.

1. Government

In this control and management report, it is assumed that more than 40% of the share of the refinery is in the hands of the government or that it has the majority of the seats in the board of directors. This assumption is considered in all institutions. According to this report, the government has a share in 4 refineries in the country, and among these refineries, it controls and manages the Abadan refinery with a 100% share. He is also involved in the management of Isfahan Refinery by having one board seat directly and one seat indirectly.

2. Private sector

The private sector has only been involved in the control and management of the Kermanshah refinery. Statistics show that 80% of the shares of this refinery have been transferred to the private sector in the process of privatization.

3. Social Security Organization

This organization is a shareholder in seven refineries in the country, and in three refineries, Star of the Persian Gulf, Lawan and Imam Khomeini (Shazand), it owns a share of more than 40% and is responsible for the management of these refineries. Also, this organization has two board seats in Bandar Abbas Refinery and is involved in the control of this refinery.

4. Justice shares

This organization is a shareholder in 6 refining companies, but only controls Tehran refinery. This company’s direct and indirect share of Tehran refinery is around 82%.

5. “Retirement, Duty, Savings and Disability Fund of the Employees of National and Merged Banks” and the Social Security Organization of the Armed Forces (SATA)

This organization is directly and indirectly a shareholder in four refineries. Among them, it owns the most shares in Tabriz and Shiraz refineries with 50% and 54%, respectively, and manages these two companies.

6. Oil industry employees’ pension fund

This fund is a shareholder in two refineries in Isfahan and the Persian Gulf, but the share of this organization in each of the refineries is less than 40%. In this way, this organization does not have a share in control and management in the oil refining industry.

7. Board of Trustees of Saving Currency

This institution, which was established in 1978, is a shareholder only in Isfahan Refinery. The statistics show that this board’s share of Isfahan Refinery is 15%, which has no effect on the control of this refinery.

So far, it has been determined to what extent each institution has been involved in the control and management of the country’s refineries. Now, in order to see the level of involvement of these institutions in the oil refining industry, we must consider the total nominal capacity of the refineries as equivalent to the entire industry. According to this report, the total nominal capacity of the country’s refineries is equal to 2 million and 168 thousand barrels of oil per day. Now, to calculate the share of each institution in this industry, we use the total share of the capacity of each refinery from the total capacity of the industry. For example, the government manages the two oil refineries of Abadan and Isfahan Oil, each of which has a share of 18 and 16.6 percent of the total nominal production capacity of this industry, respectively. In other words, the government controls about 35% of this industry.

According to this report, the largest share in this industry is related to the social security organization. This organization controls 45% of the entire industry. The lowest share in this industry is related to the private sector, which controls only one percent of the entire industry.