We object to the price floor of five thousand tomans for petrochemicals feed formula/ the exchange rate of petrochemicals becomes 37500 tomans

Ahmad Mahdavi Abhari said: The exchange rate of petrochemicals is 37,500 tomans, feed, products and the currency of petrochemicals are also calculated based on the same exchange rate.

According to Energy Press reporter, the decision to increase the feed rate of petrochemicals was canceled and the determination of the feed rate returned to the formula approved in 2014. Ahmad Mahdavi Abhari, the secretary of the Petrochemical Employers’ Trade Union, in an interview with Energy Press, referring to the formula for the feed of petrochemicals, said: This formula was approved by the parliament in 1993 and announced by the government in 1994. At the same time, we objected to its defects. During the war between Russia and Ukraine, the flaws of this formula became visible.

Mahdavi continued: Based on this formula, two hubs in Europe and two hubs in America and Canada have been considered to determine the feed rate of petrochemicals. To calculate the feed rate of petrochemicals, the average domestic price of Iran’s gas in export and import is 50%, American and European hubs are also considered 50%.

He said about the problem of feed rate formula: The weakness of the formula is in the discussion of two European hubs. This year, in the new formula, they wanted to fix the defect that if the price of those four hubs rises above Iran’s export gas, Iran’s export gas is the criterion and action. This is somewhat good, but I wish they would put this ceiling on Europe as well.

Pointing out that setting the price floor of 5 thousand tomans in the feed formula is wrong, Mahdavi said: this price floor of 5 thousand tomans is a very wrong thing, that is, the same problem we have in the formula for calculating ethane gas and for that the floor is 220 dollars per They have put money, here they have put 5 thousand tomans. If the future price of gas in Europe has a significant decrease, according to the formula, they should include the European hub, but they cannot do it because of the price floor of 5 thousand tomans, and this is not logical at all.

He said about the change in the exchange rate of petrochemicals: the exchange rate will definitely be 37,500 tomans, feed, products and the currency of petrochemicals are also calculated based on this exchange rate. Based on the exchange rate of 37,500 tomans, the price of petrochemical feed will be more than 5 thousand tomans, but it is much better and justifiable compared to 7 rates of 7 thousand tomans for feed and 4 thousand tomans for fuel.

Regarding the problems of the ethane feed rate formula, Mahdavi mentioned: the problem of the formula is in determining the price floor. The government should not pay less than $220, which is wrong. In calculating the ethane feed rate, they have used the global price of polyethylene as a basis. But the point is that we don’t only produce polyethylene from ethane, it’s like saying we only get butter from yogurt! Other products are produced from ethane that have been overlooked. This formula also has an economic problem and our suggestion is that the calorific value of methane gas should be used as the basis for calculating the ethane feed rate.