Saeed Shojaei, Deputy Minister of Planning at the Ministry of Industry, Mine and Trade, mentioned the effects of energy constraints on the activities of production enterprises during a meeting of the Energy and Environment Commission of the Tehran Chamber of Commerce, estimating that the loss in the industry and mining sector due to the non-production of products in 2024 will reach about 303 trillion Toman. This is while last year's figure had reached 473 trillion Toman.
The impact of energy constraints on industry
Shojaei stated that maintaining production has become a red line for the government in energy policy-making, and in meetings of the Supreme Energy Council and government sessions, the necessity of considering the requirements for continuous production in energy decision-making has been emphasized. He also pointed to the reduction in profit margins for industries, stating that the profit margin for the steel industry, which was about 33 percent in 2021, has now dropped to less than 6 percent. In some units, this figure has decreased to about 2.5 percent. Meanwhile, the profit margin for the banking sector has increased from 34 percent in 2021 to over 50 percent.
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Challenges in gas supply during winter
The Deputy Minister of Planning at the Ministry of Industry, Mine and Trade further referred to the gas supply program for industries during the cold season, stating that the daily gas consumption of the entire industry in the country, including petrochemicals and refineries, is about 250 million cubic meters under normal conditions. However, in the table reviewed by the Supreme Energy Council, 161 million cubic meters has been considered for the period of constraints and peak consumption. This program will be implemented from December to mid-March, and the Ministry of Industry, Mine and Trade will announce the distribution of gas by industry.
Shojaei emphasized the necessity of prioritizing industries in gas allocation, stating that the gas supply for export-oriented industries, especially the steel industry, should be preserved as much as possible. Additionally, given the role of small industries in job creation and the social consequences of production constraints, it is essential to minimize the limitations on these units.
He also referred to the price differences of gas in various sectors, stating that the price of gas received from the network for each cubic meter in the steel revival sector is about 25,000 Toman, while the discovered price in the stock market has reached about 83,000 Toman. This discrepancy can challenge production activities.
Shojaei proposed that in the gas pricing formula, the resilience conditions of industries should be considered, and a specific ceiling should be set for price increases. Additionally, in emergency situations or during spikes in international hub prices, the possibility of waiving some components of the pricing formula or using a mechanism similar to that of the first three months of the year should be provided.
Demands of the Ministry of Industry, Mine and Trade for improving the status of industries
The Deputy Minister of Planning at the Ministry of Industry, Mine and Trade identified the implementation of the approved table of the Supreme Energy Council for gas allocation and assistance in determining energy prices for industries as two main demands of this ministry, also mentioning gas imports by industries and the private sector as solutions to reduce energy constraints. These actions can help improve the status of industries and reduce pressure on the labor market.
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