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A New Directive by "National Competition Council" Stipulates that Vacuum Bottom Will Be Offered on Iran Mercantile Exchange Based on Free Exchange Rate for Dollar.

In line with the new decision by the Competition Council it was agreed that a guideline be prepared within a month in order for vacuum bottom to be offered on the Iran Mercantile Exchange in compliance with the necessities of long-term contracts
International Affairs and PR
A New Directive by ꞌꞌNational Competition Councilꞌꞌ Stipulates that Vacuum Bottom Will Be Offered on Iran Mercantile Exchange Based on Free Exchange Rate for Dollar.

Based on a report by IME international affairs and PR, according to section 5 of article 58 of the law  of implementation of general policies of principle 44 of Iran's Constitution and in line with plans of National Competition Council as to market conditions assessment for bitumen and vacuum bottom, it was decided that in order for vacuum bottom to be offered under uniform procedures by all refineries on IME, a guideline be prepared to be submitted to Competition Council with principles of enhancing transparency, better conditions for competition, long term contracts requirements and the exchange rate stated by "Sena System" of Central Bank taken into consideration.

It is estimated that Iran exports 3 million tonnes of bitumen and its production using vacuum bottom as the feed material is an attractive business as it could be started for a relatively small outlay. In the meantime, for such businesses the price of vacuum bottom is calculated based on the official (subsidized) exchange rate for dollar, giving them a considerable advantage, as they sell the manufactured bitumen based on the free exchange rate for dollar.

Given that, the market of bitumen is experiencing a false demand created by the difference between the two exchange rates mentioned above, distorting the balance between supply and demand with adverse effects on competitive atmosphere of the market. In view of that, IME seems to be a logical solution to escape the harms threatening the bitumen market.   

ID: 50058555

Published on: Saturday, November 11, 2017 15:00

Source: IME

View count: 7

Thursday, November 23, 2017 05:25

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