Deputy Oil Minister Hassan Abbaszadeh said the move to grant arbitration authority over petrochemical utilities pricing to the National Petrochemical Company (NPC) was not a directive approach, but a regulatory solution aimed at resolving disputes and stabilizing the market.

Explaining the arbitration on utilities pricing, Abbaszadeh said deep disagreements among petrochemical companies in recent years over auxiliary services prices had led to lawsuits. As a result of court rulings, prices announced for the Iranian years 1400 to 1403 (2021–24) were annulled, creating uncertainty in capital markets and even leading to the suspension of trading in some companies’ shares.

He said continuous follow-up efforts began in the administration last fall to resolve the issue. The government’s Economic Commission tasked the NPC with handling the dispute, after which intensive meetings were held and the case was reviewed on a proper footing, ultimately leading to a strategic consensus among petrochemical companies.

Abbaszadeh noted that, with the consent of all parties to NPC arbitration, the arbitration ruling on utilities prices for Fajr Energy and Mobin Energy was issued in April 2025 and applied by the companies in their financial statements.

Stable frameworks to improve the business climate

Abbaszadeh said assigning arbitration authority to the NPC reflected the company’s core role in governance, regulation and dispute resolution, as well as in creating stable frameworks to improve the business environment in the petrochemical sector.

He said professional expertise and a facilitative, cooperative approach toward companies were essential to fulfilling that mission, stressing that the NPC does not own the companies, which have their own shareholders. “Our approach is problem-solving, not coercive,” he said, adding that such an approach would be welcomed by the private sector.

As NPC managing director, Abbaszadeh said the historic agreement ended a long-standing dispute that had also affected the country’s economic stability and outlined a new model for interaction between the government and the private sector in the strategic industry.

Pricing pathway

Abbaszadeh said utilities prices before 2018 were set through general agreements between producers and consumers and announced by the NPC.

In 2018, he said, a complaint over utilities pricing was filed with the Competition Council, which confirmed the monopolistic nature of petrochemical utilities and issued a pricing formula. Under that decision, the NPC, as the regulator’s technical arm, was designated to calculate and announce prices based on the approved formula.

He added that in 2021 the Competition Council revised the formula to make pricing more equitable, requiring updated valuations of the assets of utilities companies by official experts. That led to sharp price increases and dissatisfaction among consumers.

Efforts to align companies

Abbaszadeh said the dissatisfaction prompted the Administrative Justice Court in 2024 to annul utilities prices set from 2021 to 2024, leaving no alternative formula in place and resulting in the suspension of some companies’ trading symbols.

He said the issue was referred in December 2024 by the first vice president to the government’s Economic Commission, and then in January 2025 to the Oil Ministry and the NPC. Intensive expert-level meetings were held to gather views from holdings and petrochemical companies and bring them into alignment.

As a result, Abbaszadeh said, after resolving past pricing challenges, the NPC’s arbitration role in utilities pricing was endorsed by the Supreme Council for Economic Coordination of the heads of government branches.

Transparent, stable dispute resolution

Abbaszadeh said the NPC plays a key role in sustainable development of the petrochemical industry by creating transparent and stable mechanisms for dispute resolution. He said companies have been asked to refer disputes to the NPC for mediation or arbitration before turning to the courts, so issues can be resolved in a fully expert-based setting.

He said the approach, based on smart regulation and professional arbitration, would reduce internal tensions, build investor confidence and ensure fair resource allocation, while helping optimize the value chain, boost international competitiveness and align private-sector interests with the country’s broader economic goals.