Deputy Oil Minister for Planning Ahmad Zar’atkar
said that of roughly 1,000 trillion rials earmarked for subsidy reform, about
370 trillion rials are sourced from natural gas sales, with around 170 trillion
rials coming from gas supplied to petrochemical units.
Speaking on state television, Zar’atkar said the
government’s priority remained protecting public livelihoods and that energy
pricing was governed by the subsidy reform law, which requires domestic gas
prices to gradually rise to 75% of export prices over a five-year horizon, with
the differential used to finance cash subsidies and energy efficiency measures.
He said the current average price of gas
feedstock and fuel for petrochemical plants was close to 30% of export prices,
well below the level stipulated by law. Iran exports gas at about 29–31 cents
per cubic metre, while the average price paid by petrochemical producers is
around 10 cents, he added.
Zar’atkar said gas pricing for industries had
followed a defined legal framework since 2016, largely under annual budget
provisions, and rejected claims that petrochemical feedstock prices were as
high as 22 cents.
He said most petrochemical producers, excluding
some methanol plants, maintained healthy profit margins, noting that urea and
polymer producers typically recorded margins of 24% to 50%. The main pressure,
he said, stemmed from falling global methanol prices rather than domestic gas
pricing.
Zar’atkar stressed that revenues from gas sales
to petrochemical firms, other industries and household consumers were fully
transferred to the subsidy fund and that the oil ministry did not benefit from
them directly.
“Any additional support for petrochemical
producers would come at the expense of subsidy resources and, ultimately, the
public,” he said, warning that a 20% cut in gas pricing revenues could reduce
subsidy funding by more than half and disrupt payments to vulnerable groups.
He added that petrochemical companies owed about
120 trillion rials in unpaid feedstock charges, with payments typically running
about a year in arrears, despite the sector’s positive performance in export
earnings and foreign currency repatriation.