Pars Oil & Gas Company announces petroleum ministry supporting Domestically Manufacturing

Tuesday, Nov 20, 2012

Petroleum Ministry plans to set up a fund in order to support local contractors and manufacturers in their efforts to commercialize modern technologies in oil industry.

Speaking on Sunday at the 8th Supreme Council Of Boosting Domestically Manufacturing, Rostam Qasemi said: The draft and part of guidelines of the fund’s functioning have been prepared but they are due to be upgraded through asking some feedback from those who are involved in the issue.

Qaseme further said petroleum ministry plans to present the bill of formation of the fund to parliament adding the fund would cover every aspects of financial and technical contribution to the manufacturers and contractors.

‘Raw materials make up about 70 to 80 percent of the cost of producing a commodity’, Qasemi said, adding when we pay 10 percent of the contract in advance to a manufacturer he has to meet the remainder of financial needs through banks and other financial institutions’ loans. He continued: In this case, it is evident that the manufacturer has to repay part of the facility as interest, an issue that makes manufacturing uneconomical and competition with foreign manufacturers difficult.

He said one of the advantages of proposed fund is that when a project is defined the ways of financing the project is also envisaged, so if we can lend 50 to 70 percent of costs to manufacturers the bulk of their problems will be over.

Qasemi said in order to support domestic manufacturers, petroleum ministry had banned import of those pumps that their similar ones are manufactured at home. ‘Therefore all petroleum ministry subsidiaries should provide their pumps form domestic manufacturers excluding those pumps that their imports are authorized under special licenses or acceptable justifications' Qasemi noted.

Source: Pars Oil & Gas Company

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