Mohsen Paknejad made the remarks Wednesday after a meeting with petrochemical industry stakeholders marking National Petrochemical Industry Day. Speaking to reporters, he said the meeting provided a valuable opportunity to hear directly from industry players.

“The petrochemical industry plays an effective role in earning foreign currency, creating jobs and completing the value chain,” Paknejad said. “Therefore, it is essential that their issues and challenges be reviewed within the framework of the sector’s regulator—the National Petrochemical Company, which operates under the Ministry of Oil—and that steps be taken to address them.”

He said participants raised concerns related to development, access to global markets, product diversification and completing the value chain. Some of the issues can be addressed within the Oil Ministry, he said, adding that his colleagues were present at the meeting.

It was agreed that a joint working group would be formed to follow up on these matters, Paknejad said. Issues falling outside the ministry’s remit would be consolidated through the working group and pursued within the broader government and relevant agencies.

“We will continue to pursue the issues and concerns of petrochemical industry players so that, God willing, they reach a result,” he said.

Feedstock price, supply top industry concerns

Addressing feedstock issues, Paknejad said resolving matters such as feedstock pricing more quickly would be a significant help to the industry. Both price and volume are critical, he said, noting that part of the challenge stems from the country’s energy imbalance.

“As a result, we are compelled to impose restrictions or manage energy consumption during the cold season,” he said. “This naturally affects average capacity utilization and investment in the sector, and until the imbalance is resolved, there is no alternative.”

Paknejad said one solution to addressing the energy imbalance is for petrochemical companies to participate in gas field development.

“The involvement of petrochemical companies in investing in gas field development can facilitate their feedstock supply,” he said. “Fortunately, this has been well received, and there are suitable legal capacities in place.”

On pricing, he said industry representatives have expressed concerns about the feedstock pricing formula, adding that it was agreed the formula would be reviewed in expert-level meetings.

Price rent alone not sustainable

Paknejad stressed that profitability in the petrochemical industry should not be based solely on feedstock price advantages.

“Our support should enable industry players to compete effectively in global markets, but relying solely on price rent is not a defensible approach,” he said. He added that continued dialogue and consultation would seek appropriate solutions.

Providing an update on gas production, Paknejad said upstream output has increased this year. Part of the increase comes from onshore gas fields such as Khartang and Tous, which are expected to add about 5 to 6 million cubic meters per day of new capacity within the coming week.

Another portion of the increase, he said, comes from offshore operations, where in-field drilling has yielded results and a significant amount of new capacity is being added.

“While the increase is modest, it can help, to some extent, alleviate the energy imbalance we are currently facing,” he said.