Petroleum Business Review
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Assessing the Feasibility of an Effective Regulatory Framework for Iran's Petrochemical Industry

Document Type : Original Article

Authors

MohammadReza Shokouhi 1
Asgar Khademvatani 2
Seyed Mohammad Javadi 3

1 Assistant Professor, Department of Energy Economics and Management, Tehran Faculty of Petroleum, Petroleum University of Technology, Tehran, Iran

2 Department of Energy Economics and Management, Tehran Faculty of Petroleum, Petroleum University of Technology, Tehran, Iran

3 Assistant Professor, Accounting and Financial Management Department, Petroleum Faculty of Tehran, Petroleum University of Technology, Iran

https://doi.org/10.22050/pbr.2024.442681.1328
Abstract
In recent years, the completion of the value chain and increased exportation of petrochemical products have been utilized to offset oil and gas export losses. As a result, this may have created various challenges and complexities within the oil and gas industry. The study aims to identify key challenges confronting Iran's petrochemical industry, with a particular focus on regulatory issues. It seeks to distinguish and prioritize the most critical regulatory factors necessary for establishing an effective regulatory framework in the petrochemical sector. For this study, data was collected through several interviews and questionnaire with Iran's petrochemical experts. With the collected data, the Delphi method was utilized to help identify the most critical challenges. The impact and significance of each challenge were determined through statistical analysis. The research findings indicate that the most important challenges are the weakness of laws to attract foreign and domestic investors, the lack of trust and lack of integration in this industry from upstream to downstream sector, respectively. Also, based on the research results, it show that it is essential for Iran's petrochemical industry to have two regulatory agencies. The "Competition Council" and the "Securities and Exchange High Council" as regulators of the physical and financial markets are considered, however, for them to regulate effectively the overall structure of these councils must first be dramatically reformed. The important effective regulating factors which should be emphasized by the regulator in Iran's petrochemical industry were indicated and ranked as allocation, responsiveness, financial independence, legal independence and political independence.

Highlights

The important optimal regulatory factors that should be emphasized by the regulatory in the Iranian 
petrochemical industry were mentioned and ranked in the order of ratio, accountability, financial 
independence, legal independence, and political independence.
• The most important challenges are the weakness of laws to attract foreign and domestic investors, the lack 
of trust, and the lack of integration in this industry from the upstream sector to the downstream sector.
• The Competition Council and the Securities and Exchange High Council as regulators of the physical and 
financial markets are considered; however, the overall structure of these councils must first be dramatically 
reformed so that they can effectively regulate.

Keywords

Effective Regulatory Framework
Petrochemical industry
Features
Challenges
Delphi method
Subjects
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  • Receive Date 10 February 2024
  • Revise Date 28 March 2024
  • Accept Date 22 June 2024

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