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Pergas of a preliminary contract with Tehran for the development of the Keranj oilfield in the southern Khuzestan province. Pergas plans to pump a total 655mn barrels of oil from Keranj over the next 10 years.
9.1.2 Automotive sector news
Iran’s car market is slipping into recession, according to June 19 reports from Iranian media outlets. Tasnim News Agency reported, for instance, that potential car buyers are holding off from making purchases given the sudden price hikes introduced for new and second-hand vehicles. The price inflation has been caused by the collapse of the Iranian rial (IRR) in the face of economic uncertainties generated by the unravelling nuclear deal and reintroduction of heavy US sanctions against Tehran.
Car producers and importers in Iran have reluctantly but inevitably increased their vehicle prices, with the IRR plunging against the dollar to IRR72,000 on the black market, compared to the official rate of IRR42,000. Imported vehicles have also been hit by the ‘invisible double tax’ as most are classed under the “luxury” label and are thus not eligible for the official rial to the dollar rate. Demand for cars continues to slide as a great many Iranians are priced out of buying locally assembled vehicles, including the more than 30-year-old Peugeot 405 model which continues to be produced under a joint venture arrangement with Iran Khodro (IKCO), Iran’s largest auto manufacturer. Second-hand vehicles have also increased in price in recent weeks as more buyers are pushed into the market.
Sudden price rises are not new to the Iranian car industry, and with each bout of devaluation of the IRR, prices usually ascend by a minimum of 5%.
Iranian car manufacturers are caught in a dilemma when it comes to the exchange rate fluctuation because they must limit their price hiking in accordance with figures which are set by a committee that comes under the Ministry of Industries, Mining and Trade. The committee, which consists of government ministers, is required to set prices on a monthly basis, but it is now under pressure to raise auto prices without alienating those left in the shrinking pool of car buyers.
9.1.3 Transport sector news
Iranian Vice President Eshaq Jahangiri arrived in the Caspian Sea free trade zone and town of the same name Bandar Anzali to inaugurate several industrial and commercial projects including the China-Kazakhstan-Iran Shipping Corridor, according to Iran Labour News Agency on June 26. Tehran is actively pushing companies to open in the northern port town which acts as a gateway to and from Russia and the CIS. The port is also playing a role in connectivity via rail, with onward connections to Turkey and Azerbaijan.
He emphasized that for the first time the railway will be used as an important link for carrying some of the cargo coming across Kazakhstan and the Caspian Sea to Iran, adding that creating good and effective relations with the countries around the Caspian Sea is an objective for Iran.
The Supreme Council for Free Trade, Industrial and Special Economic Zones lately said it is to offer a 70%-discount on export tariffs to companies setting up in port locations on the Caspian Sea including Bandar Anzali.
Azerbaijan and Iran are in final negotiations to launch the first railway to connect Tehran and Baku, Trend News Agency reported on June 25.
37 IRAN Country Report July 2018 www.intellinews.com