MP: Implementation of major refinery projects will offset US oil sanctions

Unilateral US sanctions imposed on Iran’s oil sector will fail to impact the domestic economy if the country completes implementation of its major refinery projects and reduces its exports of crude oil through increasing production of petrochemicals, said an Iranian MP.

Speaking to Iran Daily in an exclusive interview, Ali Bakhtiar, a member of the Iranian Parliament’s Energy Committee, added it is possible for the Iranian government to draft the budget bill without relying on the country’s oil income.

Commenting on the plan to increase the capacity of the country’s gas condensates and oil refineries using the people’s capital, he noted that the project involves directing the liquidity accumulated in the society toward boosting production of refinery products, which will help increase the country’s refining and petro-refining capacity by two million barrels per day.

“The plan was approved by the Iranian Parliament during the past 18 months. The Guardian Council has also consented to the project. The Oil Ministry has drafted the bylaws of the project and submitted them to the government to prepare the ground immediately for its implementation.”

Bakhtiar noted that the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei has also voiced support for the project, adding the plan can inject the liquidity amassed in the society and drawn to nonproductive sectors into the domestic oil industry’s downstream sectors and help boost production.

Turning to the trend reflected by the country’s efforts to achieve self-sufficiency in gasoline production, the lawmaker noted that, “The government and Parliament have cooperated well to this end. The country could save itself from the negative impacts of the sanctions by inaugurating three trains of the Persian Gulf Star Refinery in southern Iran through funds made available from the resources of the National Development Fund (NDF). Iran has turned into an exporter of gasoline from an importer, and is by no means in need of importing the fuel.”

Bakhtiar said that currently, it is possible to direct the liquidity available in the domestic economy toward completing the country’s unfinished refinery and petro-refinery projects, such as developing Siraf refinery (southern Iran) and Anahita refinery (western Iran), implementing optimization and upgrading plans and constructing new refineries.

“This way, sanctions on Iran’s oil sector will no longer be a problem for the country.”

The circumstances became very difficult for Iran’s oil exports following the US withdrawal from the Joint Comprehensive Plan of Action in May 2018, signed between Iran and the P5+1 in 2015, and the reimposition of unilateral sanctions on Tehran, he said. “Nevertheless, even under such unfavorable circumstances, we are currently exporting oil.”

The lawmaker noted that this comes as the US always uses sanctions as a threat against the Islamic Republic.

This US policy, on the other hand, is an opportunity for the Islamic Republic to reduce its dependence on oil income in the budget, which has been among the main targets pursued by the country following the victory of the 1979 Islamic Revolution, the MP emphasized.

“The possibility exists at present to draft the budget bill for the year to March 2021 in such a way as to reduce the country’s reliance on oil revenues and pave the way for the further development of a knowledge-based economy. If we seek to accelerate the country’s development, we must enhance our scientific knowledge, use modern technologies, further rely on our innovation and creativity and empower our human workforce.”

Bakhtiar said Iran enjoys numerous advantages in industrial, agricultural and tourism sectors which are in need of greater attention.

“If we manage to replace our oil income with revenues generated through boosting domestic production and collecting taxes, we will be able to move toward sustainable development and economy. Then, it will become possible to deposit our oil income into the NDF and use it for developing and improving the country’s infrastructure.

He stressed that support provided by the domestic private sector can also be of great contribution to this process.

“This is the solution which has been used in developed countries in the past years and has produced favorable results. Countries such as Turkey and South Korea have also treaded the same path and used the same methods to accelerate their development without having access to oil revenues and have been successful in this regard.”

Source: Iran