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devaluation of the Iranian rial (IRR) in the face of US sanctions has, meanwhile, given Iran a big problem with petrol smuggling.
Oil Minister Bijan Namdar Zangeneh noted that Iran was producing almost zero petrol back in 2012, when the country relied on fuel imports. The country’s daily petrol production capacity stood at 115mn litres, 11 mn litres above its daily demand, he added.
“Excess output will be earmarked for export [ to regional markets],” Namdar Zangeneh said, pointing out that of all the Organisation of Petroleum Exporting Countries (OPEC) “Iran is now the largest producer of petrol among them”. “US [sanctions] do not allow Iran procurement of certain equipment [in the refining and petroleum industries] for the betterment of the environment, which is a crime; however, we will supply them anyway,” the minister also said.
As part of its commitment to environmentally-sound production, Namdar Zangeneh said he hoped Iran would meet a target of stopping all gas flaring by 2021.
9.1.2 ​Automotive sector news
Iranian auto components makers lobby for rules relaxation
Saeed Bastani, a member of Iran’s parliamentary commission on industries, mining and trade, has disclosed that the government plans to sell its stakes in automakers Iran Khodro (IKCO) and SAIPA, according to Iran Student News Agency.
The Rouhani administration announced at the beginning of its second term in 2017 that the government intended to sell off its 14% stake in largest Iranian automaker Iran Khodro and its 17% stake in the second largest, SAIPA. Since then both companies have been severely impacted by the heavy sanctions introduced against Iran by the US last year—foreign partners including PSA Group’s Peugeot and Citroen pulled out of Iran fearing secondary sanctions from Washington should they stay.
Bastani reportedly said: “Earlier last week, the government's economic commission decided to sell all government shares in car companies and some other state-owned corporations.”
Once the stake sales were completed, “the country’s automotive sector will be on the verge of a major transformation”, he added.
The path to full privatisation will take at least a year, but the reported clearance given by the important commission is a significant step forwards.
IKCO and​ ​SAIPA have been a drag on the government’s coffers​ ​since they were taken into state ownership following the 1979 revolution. A lack of investment and a reliance on foreign partners have left the companies producing cars designed in the 1980s, including the Kia Pride and Peugeot 405.
Bastani added that ministries were also gearing up to sell their stakes in six other companies including major Tehran football teams Persepolis and Esteghlal–the two biggest teams in Iran.
Iranian auto components makers are lobbying the Ministry of Industries, Mining and Trade to ease rules to help their sector, according to Mehr News Agency. ​Secretary of the Iranian Auto Part Manufacturers Association, Arash Mohebinejad, reportedly said member companies have four major difficulties, namely a lack of liquidity, pricing, raw material costs and letters of credit. Some of the issues could be addressed by removing government price controls on parts, he added.
Iran’s auto parts makers have suffered in recent years because the country’s two main carmakers, Iran Khodro (IKCO) and SAIPA, have struggled to pay
40​ IRAN Country Report​ October 2019 www.intellinews.com