Preconditions for Removing Preferential Oil Currency and Market Impacts

Currently, order placement is the most important challenge that has created many problems for the oil industry. The restrictions that have been placed on importers and producers and the very time-consuming issue of foreign exchange allocation have caused the process of foreign exchange allocation and deposit to usually take about 6 to 11 months.

In this market situation where we are facing a shortage of inputs, there is no basis for eliminating the preferential currency. This action should be taken when the country’s reserves are sufficiently secured, at least for the next 8 months, and the competitive oil market is in a normal state so that oil reaches the people at the approved price.

The allocation of preferential currency for the import of oilseeds and crude oil has caused a fourfold difference in the price of oil in Iran compared to neighboring countries, and this price difference has created an incentive for smuggling. Therefore, if the preferential currency is eliminated, the price of oil will be equal to that of neighboring countries, but when we have an equal difference with neighboring countries, the incentive for smuggling is very high. As long as this difference exists, nothing can be done; because it is very profitable for smugglers.