TEHRAN – Iranian Oil Ministry has reduced the base price of ethane, which is a major feedstock for petrochemical complexes, by 10 percent, IRNA reported.

The decision comes as the global oil prices have fallen significantly due to the outbreak of the coronavirus and consequently the value of other products like petrochemicals has also declined in global markets.

Ethane price was previously set based on the prices of its comprising elements including polyethylene and naphtha, according to which the base price was $220 and the ceiling was $400 per ton in Iran.

Oil Minister Bijan Namdar Zanganeh, however, ordered the reduction of prices by 10 percent to help the petrochemical complexes get through the current hard times by increasing their interest margins.

Back in September 2019, Managing Director of Iran’s National Petrochemical Company (NPC) Behzad Mohammadi said the feedstock for petrochemical complexes is going to reach equal to 1.7 million barrels per day (bpd) of oil by 2025.

The official said that last year (ended on March 19), the petrochemical industry received 35 million tons of feedstock equivalent to 800,000 barrels of crude oil per day from the oil industry.

According to Mohammadi, by the realization of the second leap in the country’s petrochemical industry, 62 million tons per year of feedstock (equal to 1.4 million bpd of crude oil) would be supplied to the sector by 2021.

“This figure will reach 1.7 million bpd by 2025 when the third leap in the industry is realized,” he said.

Petrochemical industry plays a crucial role in Iran’s non-oil economy, as the petrochemical export is the second-largest source of revenue for the country after crude oil. Petrochemical exports already constitute nearly 33 percent of the country’s non-oil exports.

EF/MA