Tehran, March 17, IRNA — The Majlis on Monday passed a bill which allows the oil and energy ministries to invest up to $100 billion in foreign exchange and 500,000 billion rials a year to reduce costs and increase productivity in the energy sector.
According to the law, the two key ministries are authorized to sign deals with natural or legal persons to ‘augment quality, curb production costs and encourage judicious consumption of oil, gas, gas condensate and petroleum products, invest in the import/export of goods and services, and fund contracts to reduce casualties or financial losses in energy projects.’
Parliament also passed a bill Monday allowing refineries to export their surplus petroleum products, provided that they clear their debt for the crude oil and gas condensate they have so far received.
As per the legislation, refineries should pay 95 percent base price (FOB) in the Persian Gulf region for every barrel of crude and gas condensate. Refineries will then be allowed to export their surplus output independently and without the government intervention.
The government will be required to disburse the share of the National Development Fund of Iran (NDFI) from the export of refineries’ surplus output from its own resources. NDFI is the country’s sovereign wealth fund, founded in 2011 to replace the Oil Stabilization Fund, FT reported
Based on Article 84 of the Fifth Five-Year Economic Development Plan (2011–2016), the NDFI was established to channel oil and gas revenues into productive investments for future generations. Provisions also have been made for the NDFI to lend in foreign exchange and in rials to domestic manufacturing companies at low interest rates to improve output and create jobs.