The new resolution to increase the feed rate ceiling for petrochemical and industrial gas should be annulled – Tejaratnews

According to Tejarat News, Azim Tabet’s letter about petrochemical gas feed states:

According to Article 6 of the Articles of Association of Stock Brokers and Securities Association, one of the important goals of this association is to help create a fair, competitive and efficient securities market in the country in order to gain the trust of investors and considering that currently the largest active industry In the securities market, there is the petrochemical industry, any change in the price of feed or the price of the products of that industry can seriously affect the capital market, unfortunately, the recent decision of the honorable board of ministers regarding the unexpected increase in the price of feed gas and fuel for the petrochemical industry due to the following reasons And it has distorted fair competition in this market:

According to the name of this year as “the year of curbing inflation and production growth” by the Supreme Leader, a 100% increase in the price of fuel gas, a 40% increase in feed gas and setting the price of the products of that industry at 28,500 Tomans will cause a sharp decrease in the profitability of petrochemical companies. which leads to a negative impact on the stock value of those companies and, as a result, the entire capital market, the possibility of stopping their production and the losses of investors active in this industry.

In 2014, the gas price formula was announced by the Ministry of Petroleum, in which the gas price of European hubs was determined as the basis of the price. In recent years, due to the fluctuations of gas prices in Europe, this formula has weakened the competitiveness of Iranian companies with their regional competitors, so that in 1401, a ceiling of 5000 Tomans was set for the price of the gas formula, but in the recent decree, the price of gas feed in numbers A constant of 7 thousand tomans is considered, but according to the report of the Islamic Council Research Center, this number will reach more than 8 thousand tomans, which, due to the lack of compliance with market fluctuations, brings a high operational risk to related industries.

This resolution will directly affect more than 60% of the capital market and will cause a decrease of more than 52 thousand billion tomans in the profit of this market and, as a result, a drop of more than 500 thousand billion tomans in the market value and the loss of investors. Mandatory pricing and spur-of-the-moment decisions create uncertainty and reduce investment in the strategic petrochemical industry and become a serious obstacle for the establishment and entry of petrochemical companies into the capital market. This problem not only affects the financing of petrochemical companies present in the capital market, but it will also involve this market in a more serious crisis.

Since petrochemical, refining and metal industries have a significant weight in equity portfolios and social security, state and army pension funds, the decrease in profitability of these industries will reduce the profits of equity shareholders and pension funds and create public dissatisfaction and the ability to fulfill obligations This presents the funds with serious challenges.

With regard to the issues raised, the withdrawal of capital from the important and vital part of the petrochemical industry and its entry into brokered and non-productive markets such as gold, currency, cars and housing will lead to an unreasonable increase in the inflation rate and a decrease in national production; The Association of Stock and Securities Brokers, as one of the self-regulating organizations of the capital market, requests Your Excellency, as the respected first deputy of the 13th government, to order the revision of the board’s decision, considering the interests of the capital market and the country’s economy first. Dear Ministers and its cancellation, in order to support the capital market, especially its 50 million small shareholders, the necessary measures should be taken.

Source: ISNA