TEHRAN, Jan. 26--The Oil Products Export Promotion Fund would start operations in the near future, said an oil industry official here on Wednesday, adding that the fund would help boost investments in hydrocarbon infrastructure.
Pedram Soltani, secretary of Oil Products Exporters and Producers Association, told Iran Daily that the 20-trillion-rial fund would facilitate greater participation of private enterprises in oil and gas projects.
He said the fund could help boost competitiveness of private companies in regional oil and gas industries, especially in the Persian Gulf region.
Soltani said Arab governments control their upstream oil industries but have ceded authority to the international and private companies in production and export of oil products.
"Trade and export laws as well as financial resources in Iran are not in favor of companies engaged in the export of oil products," he added, stressing that Iranian companies would need greater financial potential if they were to participate actively in the international projects.
The official said fuel smuggling is the most important challenge facing the oil products export sector, stressing that some opportunists smuggle fuel in cooking oil packages.
He criticized Iran's Customs Administration for neglecting expert views of private firms involved in production and export of oil products in its efforts to check fuel smuggling.

Ebrahim Sheibani

TEHRAN, Jan. 26--Governor of the Central Bank of Iran (CBI) Ebrahim Sheibani here Tuesday said that the government is striving to reduce the inflation rate to less than 10 percent in the fourth five-year development plan (March 2005-2010).
He told IRNA that undoubtedly the CBI favors reducing the inflation rate, but, "we have to find suitable solutions."
Materialization of economic aims needs economic mechanisms, he added.
Sheibani said that without reducing inflation rate and liquidity it is not possible to lower the banking rates. "Studies conducted in 190 countries show that banking rates in 174 countries follow a positive trend compared to the inflation rate."
Highlighting the banking policies of the US, France, Malaysia and Indonesia, he said that in these countries the actual banking rates are positive. "So if our rate is different from the general trend then, we are going against the current on this issue."
He further said that reducing the prices is the legitimate wish of the people. "However, if the expenses for public services are not raised, the country will pay dearly in the future because the infrastructure of services including water, electricity, gas and telecommunication will depreciate, the cost for modernization and repairs have to be shouldered by the people in the future.
Otherwise, the desire for investment in these fields may wane and no organ many want to invest in the sectors. Hence the country may have to resort to rationing in providing these services," the CBI governor added.
He said that the ramification of the bill on reducing banking deposit and interest rates may be favorable in the short term, but it will be bitter in the long haul.
Sheibani stated in the long-run when the deposits rates are lowered, depositors would not have any incentive to put their money in banks, and this would cripple the banking system.
The Majlis approved the bill on reducing the banking facilities in an open session last week.
If the bill is ratified--contingent on the Guardian Council approval--and becomes a law, economic fundamentals will be altered, with funds flowing into non-productive and speculative ventures.
"Liquidity should be channeled through banking system for investment in different sectors," the CBI governor added.

TEHRAN, Jan. 26--British Petroleum (BP)'s representative office in Iran said Wednesday the company is currently pursuing businesses in Iran in the area of lubricants, chemicals and trading, confirming remarks by Oil Minister Bijan Namdar Zanganeh that BP was not involved in an oil project in the hydrocarbon-rich country.
According to Iran Daily correspondent, BP said in an email that it will continue its presence in Iran through its main representative office and at the opportune time will consider business in the hydrocarbon sector in the Islamic Republic.
The statement further read that there is no change in BP's position on Iran.
BP Plc Chief Executive John Browne said earlier Europe's biggest oil company will avoid business in Iran because of US sanctions, while the company takes a 'first step' gaining access to oil fields in neighboring Iraq.
With fields from Alaska to the Gulf of Mexico, BP is the biggest oil and gas producer in the US, a country that forbids its corporations from conducting business in Iran, holder of the world's second-largest oil reserves.
"To do business with Iran at the moment would be offensive to the United States, and therefore against BP's interests," Browne, 56, said in an interview at the company's London headquarters. "We're very heavily influenced by our American position."
A source in BP Iran, which is part of BP Group, told Iran Daily that the issue has been magnified in Iran, calling for further clarifications.
Iranian oil minister said earlier that BP had no oil and gas agreement with Iran to cancel.

Saffron prices have jumped by 50 percent during March-December 2004.

TEHRAN, Jan. 26--Saffron exports reached 125.8 tons during March-December 2004, showing an increase of 28 percent against the figure for the corresponding period the previous year.
ISNA quoted the latest figures released by Iran's Customs Administration as saying that the value of saffron exports also increased by 50 percent to reach $69.9 million in the period.
United Arab Emirates with $29.9 million, Spain with $21.5 million, Saudi Arabia with $2.7 million, Sweden with $1.7 million and France with $580,000 purchased some 82 percent of the total saffron exported by Iran in the period.
The same report indicated that herbal exports increased by 19 percent to reach $90.8 million in the period, when over five million dollars worth of tobacco was also exported. Tobacco exports increased by 82 percent against the corresponding period in 2003.
Export of medicinal herbs reached some two million dollars in the period.
Saffron prices have jumped by 50 percent in recent months instilling hope for farmers who had suffered badly from record low prices.
Prices increased to over three million rials last month, showing a 50-percent rise against prices earlier in the current crop year.
While drought has pushed down yield from 4.3 kilos to 3.8 kilos per hectare, there are some farmers in the northeastern province who produce 15-20 kilograms per hectare.
Saffron exports, recovering from an earlier decline, reached $54.5 million in March-November, up by 54 percent against the figure for the corresponding period in 2003.
While the final cost for producing saffron is estimated at 2.2 million rials per kilo, the product sold for less than 2.07 million rials in early 2004, turning the once lucrative industry into an unprofitable business. Each kilogram of saffron used to sell at more than 3.5 million rials in 1999.

TEHRAN, Jan. 26--Oil Minister Bijan Namdar Zanganeh said here on Wednesday that revenues from oil exports would reach some $27 billion by March.
The minister told Fars news agency that oil revenues stood at $23 billion during March-December 2004.
Asked what would Iran think is the most logical price for crude oil, Zanganeh said some analysts advocate prices as high as $100 a barrel.
He, however, declined to say what would be the most favored price range for Iran.
The government has envisioned revenues of up to $15.2 billion from oil exports in the budget bill for next fiscal year, which begins in March.
Some $4.1 billion of the total oil revenues will be deposited in Foreign Exchange Reserve Fund.
The government would only have $3 billion to spend during March 2005-2006.
A senior Central Bank of Iran (CBI) official had forecast earlier that Iran's oil revenues would total $28 billion in the year to March.
Deputy CBI governor for foreign exchange affairs, Mohammad Jafar Mojarrad, stressed that the central bank is also expected to record a maximum $3 billion in foreign exchange reserves by March.
Mojarrad pointed out that Iran has one of the lowest foreign liabilities among developing countries.

There are plans to transform Khorramshahr into one of the most important ports in the Persian Gulf region.

TEHRAN, Jan. 26--Iranian businesses have exported 18,000 tons of goods via Arvand Roud River and Khorramshahr Port to eastern Iraqi ports, mainly Basra, in the past two months, said the head of Public relations Office of Khorramshahr Ports and Shipping Department on Wednesday.
Alireza Qanavati told Mowj news agency that some 276 vessels shipped 16,500 tons of vegetables to Iraq in the period.
Iran exported a consignment of motorcycles to Iraq on three vessels in December, he added.
Qanavati said export of goods to Iraq via Arvand Roud River would largely benefit Iranian exporters in terms of speed and transportation costs.
The activity would also help improve employment in Khuzestan province.
Given the proximity between Khorramshahr and Basra ports, which is Iraq's most important commercial hub, Iranian port authorities have expressed readiness to render services to Iraqi businesspersons.
The presence of Iraqi businesspersons in Khorramshahr Port has increased by 23 percent in the year to March with passenger transportation showing a rise of 85 percent.
There are plans to transform Khorramshahr into one of the most important ports in the Persian Gulf region.
The port suffered heavy damages during the 1980-1988 war with Saddam Hussein's Iraq.

TEHRAN, Jan. 26--Australian Embassy, in a bulletin, said here Tuesday that the Canberra will strive to boost trade and commercial relations with Iran in 2005.
In a fax to IRNA, the embassy said that Iran is potentially a lucrative market for Australian companies, notably in oil and gas sectors.
"Australia is interested in expanding trade above and beyond traditional products," it said.
Notably, Australia welcomes broadening of relations in the fields of mining, energy, as well as in academic areas and joint investments, the embassy underlined.
Volume of trade exchanges between the two sides stood at $700 million in 2001 which decreased to $300 million in 2004.
Iran imported industrial and agricultural machineries and foodstuff from Australia valued at $300 million.
The volume of bilateral exchanges is estimated to reach $600 million in 2005.
President Mohammad Khatami here on Monday called for expansion of Iran-Australia cooperation.
In a meeting with outgoing Australian Ambassador to Tehran Jeremy Newman, Khatami pointed to Australia's status as an eastern country allied to the West.
He said the 'Dialogue Among Civilizations' was a most appropriate
means of achieving peace and friendship.
The Australian diplomat, who was satisfied with the current level of Iran-Australia trade, said that Australia attaches great importance to the consolidation of bilateral relations particularly in the economic, academic, university and agricultural fields.

TEHRAN, Jan. 26--A senior privatization official said here on Wednesday the capital market is not in a favorable condition, stressing that efforts to transfer shares of state companies to private ownership also been very slow.
Mir Ali Ashraf Abdollah-Pouri Hosseini, head of Iran's Privatization Organization, told Mehr news agency that negative developments in the stock market have created obstacles to marketing state companies' shares.
He said the organization is worried about possible losses inflicted on small investors.
"Our hope is that the (stock) market would recover in the coming days," he said, adding, however, that the market would not rally unless serious decisions are adopted by the government.
He said that continued recession would discourage many people from investing in the stock market, stressing that the market would face a serious crisis if the people were to withdraw their investments.
"If the people lose trust in the stock market, the consequential shock would be so big that the market would not be able to cope with its negative impacts for several years to come," he said, stressing that the Privatization Organization is ready to fulfill its obligations in spite of the improper market conditions.
Abdollah-Pouri Hosseini had said earlier that the organization offered as many shares since mid-October as it had in the last two years, stressing that 61 tenders were held in the period.

BANDAR ABBAS, Hormuzgan, Jan. 26--Minister of Industries and Mines Es'haq Jahangiri said here on Tuesday that the Mines and Metals Special Economic Zone in this southern city will be renamed Persian Gulf Economic Zone in a bid to neutralize moves to distort the name of the stretch of water off Iran's southern coast, IRNA said.
Jahangiri made the remarks during a meeting with officials and directors of the zone.
Referring to the issue of the Persian Gulf nomenclature, he said the name has historical roots. He called on Iranian authorities to pursue the case.
The minister also urged international industrial, trade and economic companies to conduct their activities using the historical name 'Persian Gulf' to refer to the waters.
Jahangiri further expressed his ministry's readiness to support foreign direct investments (FDIs) in line with policies of the Islamic Republic.