Javad Zare’pour, discussing the transfer of ancillary service (utility) pricing to the National Petrochemical Company, noted that PetroFarhang subsidiaries are located in Phase Two of Assaluyeh. He explained that under the petrochemical industry’s master plan, Phase Two ancillary services were initially to be centrally supplied by Mobin Energy Development Company. During privatization, the utility supplier was changed to Damavand Energy Company. A contract set utility prices at 60% in rials and 40% in foreign currency to fund construction.

“These rates differed significantly from those in Phase One,” Zare’pour said, noting that rising currency rates widened the gap, even though the company pays for its feedstock—water and natural gas—in rials.

Addressing Company Disparities

He said the pricing differences between Damavand Energy and other utility providers, Mobin and Fajr, were referred to the Competition Council. Eventually, the council’s proposed pricing formula was assigned to the National Petrochemical Company. While slightly higher than Mobin’s rates, the prices are now in rials, eliminating discrimination between Phase One and Phase Two companies.

Regarding past years’ disputed rates, Zare’pour emphasized the need for fairness, with disputed foreign-currency invoices converted to rials at the exchange rate at issuance. Without this adjustment, Damavand Energy benefits from currency fluctuations while producing companies incur losses.

He added that transferring utility pricing arbitration to the National Petrochemical Company reflects the government’s focus on equity among petrochemical companies, noting that the current CEO aims to enforce fair pricing without favoritism.

Resolving Phase Two Disputes

PetroFarhang requests that, as the National Petrochemical Company resolved disputes between Mobin Energy and Phase One producers, it also address past foreign-currency invoice disputes between Phase Two companies and Damavand Energy, converting prices to rials and adjusting for the exchange rate at issuance.

Zare’pour highlighted risks posed by utility pricing to sustainable development. “Rial-based invoicing mitigates some risk, but contracts must also ensure timely supply of oxygen,” he said. He recalled that PetroFarhang subsidiaries, despite pre-purchasing oxygen from Damavand, operated at 50% capacity from 2020 to 2022 due to delayed oxygen units, resulting in multi-million-dollar losses. Proper pricing, guaranteed oxygen supply, and contract revisions covering production losses due to delays are essential for sustainable growth.

Boosting Private Sector Confidence

He emphasized that private investors have faced significant losses due to regulatory instability. Stable, fair utility pricing restores confidence. Zare’pour noted that while some contracts imposed obligations on private companies, the National Petrochemical Company has revised rates based on company-submitted documentation rather than government directives, correcting previous price disparities.

He added that under the new approach, the company has sought to eliminate pricing discrimination between Phase One and Phase Two and granted oxygen unit construction permits to other Phase Two methanol producers who are Damavand Energy shareholders.

Acknowledging Ministry of Petroleum’s Corrective Actions

Despite repeated requests, PetroFarhang subsidiaries were not granted permits to build air separation and oxygen units, forcing companies such as Sepahan Petrochemical and Kimia Pars Khavarmiyaneh to pre-purchase oxygen from Damavand Energy. Zare’pour expressed hope that the new pricing approach and issuance of construction permits will improve conditions.

He attributed losses in PetroFarhang methanol subsidiaries to sub-50–60% production capacity, caused by delayed oxygen supply and higher oxygen costs compared to other companies with construction permits. Zare’pour praised the Ministry of Petroleum and National Petrochemical Company for their corrective measures and urged that the approach continue and be applied to other industry challenges.