The funding will cover expenses required for the building of two oil refineries in the southern city of Bandar-Abbas, noted Oil Minister Seyed Kazem Vaziri Hamaneh.

The development of four other refineries in the cities of Isfahan, Arak, Shiraz and Tabriz as well as restoring pipelines, oil storage tanks and stations, are also on the agenda, he added.

Hamaneh noted that the new refineries are transferable to the private sector.

Vaziri Hamaneh had said earlier that Iran"s refining capacity will be raised to around three million barrels per day in the next six years.

Hamaneh put the current refining capacity in Iran at nearly 1.600 million barrels per day. He said construction of new refineries in Iran is high on the agenda of the Petroleum Ministry.

He said USD 8b has been invested on development of Arak and Isfahan refineries and building condensate and crude oil refineries in Bandar Abbas.

The minister said the cabinet has approved a plan to build refineries in Shiraz and Qeshm Island, adding that construction of a heavy crude oil refinery in Abadan and development of Tabriz refinery are under study.

Iran is OPEC"s second largest crude producer and is seeking to boost oil refinery capacity to end its dependency on expensive imported fuels.

First private mini-refinery was launched in Aras Free Trade Zone in Jolfa, East Azarbaijan province last week.

Speaking at the inaugural ceremony, managing director of the refinery said that ’Aras Shimi’ Refinery will produce over 200 tons of oil derivates such as gasoline, kerosene, furnace oils, diesels and light lubricants per day.

Mohammad Sabralilou added that the refinery currently has the capacity to refine 73,000 tons of oil products per annum. He noted that the capacity can increase to over 200,000 tons annually.

The refinery, covering an area of 3,000 sq.m., became operational after two years at a cost of close to 170 billion rials. Products of the refinery is planned to be exported Central Asian states, Pakistan, Turkey and the United Arab Emirates and even African and European countries. It has generated job for 120 people.