Energy Dual Pricing in Iran and its Impact on Accession to the World Trade Organization

Energy has always been one of the most controversial issues in the World Trade Organization (WTO). The significance and sensitivity of energy was doubled when the major energy-producing countries/states sought to join the WTO. To join the WTO, many energy-producing and energy-exporting states inevitably needed to modify and change their own laws. The adoption of a dual pricing policy by the applying countries appears as one of the controversial issues in this regard. The same has led to the emergence of some disputes between the energy-exporting and energy-importing countries. From the perspective of some energy-importing countries, such behaviors are seen as subsidies, which are contrary to the basic principles of the General Agreement on Tariffs and Trade (GATT) implying nondiscrimination, the principle of the most favored nations, and the national conduct. On the other hand, the Islamic Republic of Iran, as one of the largest energy-rich states, has been seeking to join the WTO. Iran subsidizes its domestic producers to support its energy sector and infant industries. This work focused on examining the pricing policies, and in particular, the approach to determining the price of energy in Iran. In addition, we studied the impact of the pricing method of the energy sector in Iran on the process of its accession to the WTO by a comparative evaluation of the accession process of the energy-producing countries such as Russia and Saudi Arabia acceding to the WTO. Through studying the laws and regulations of the energy sector of Iran, one can realize that Iran has been distancing itself from dual pricing in recent years, that it is striving to shift the price of its energy to the global price by benefiting from the experiences of the performance of the member countries of the WTO, and that it has aimed at accelerating the process of its accession to the WTO.