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Majlis Rejects AIOC Agreement

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November, 25, 1950 A.D.:
Majlis Rejects AIOC Agreement

By: Mir M.Hosseini

Majlis unanimously rejected the Supplemental Agreement by AIOC as inadequate on Nov, 25, 1950. AIOC was a symbol of western imperialism and political groups on the right and left saw it as their largest barrier to sovereignty and prosperity, and in 1949 Mosaddegh, a member of the Majlis at the time, was the driving force behind the creation of an anti-AIOC coalition called the National Front. The Front demanded a new arrangement between the Iranians and the British-owned oil company because it was exploiting Iranian resources and taking huge profits out of the country. In 1950, the AIOC earned profits in the range of 200 million pounds but Iran received only about 8 percent of that total in royalties. Indeed, the company''s profits in that year alone exceeded the profits paid to Iran over the previous fifty years. Iran, in fact, received less in royalties than they had to pay the British in taxes. In 1948, 1949, and 1950 Iran received 9, 13.5, and 16 million pounds in royalties, but paid 28, 23, and 50.5 million pounds in taxes. The British corporation did not even allow Iranian officials to examine their financial books and unilaterally determined the amounts of payments. In late 1949, the British made some minor concessions to Iran, in the so-called Supplemental Agreement, to raise royalty payments from 22 to 33 cents per barrel, but the Iranians were not impressed, particularly since the United States had just came to an arrangement with Saudi Arabia to provide for a fifty-fifty split on its oil.
In 1948 the company was presented with a list of 25 grievances or points for discussion which were later narrowed to three issues: higher royalty payments, lower prices for products sold on the domestic market and increased employment for Iranians. On 17 July 1949 a Supplemental Agreement was signed by AIOC and the Iranian government according to which royalty payments were to be increased, preference was to be given to the employment of Iranians and the prices of products sold in Iran for domestic consumption were to be reduced. The Supplemental Agreement was then submitted to the Majlis(the Iranian Parliament) in the form of a bill for enactment and ratification but the National Front leaded by Dr.Mohamed Mosaddegh fiercely opposed it. Consequently, in July 1949 Majlis adjourned without passing it. In the following months the Majlis would appoint an Oil Committee headed by Mosaddegh. When the Majlis reconvened, the Supplemental Agreement was sent to the Oil Committee for study. In December 1950 the committee reported back that it did not favor the bill.
On 19 February 1951 Mosaddegh put a formal proposal that the oil industry be nationalized. The Oil Committee asked in turn Prime Minister Razmara’s views. Razmara referred the question to a panel of government experts and on 3 March 1951 reported back that the experts did not believe the proposal was either practical or legal. Four days later he was assassinated by a member of an extremist religious nationalist party. The following day, on 8 March 1951, the Oil Committee accepted the proposal that the oil industry be nationalized.
On 15 March 1951, a single article bill was passed in the Majlis approving the principle of nationalization. On 1 May 1951 a nine-article bill was passed providing for the implementation of the principle of nationalization.

KEY TERMS:AIOC , Arab , Arabia , British , IOC , Iran , Iranian , Iranian Parliament , Majlis , Mosaddegh , National Front , Parliament , Prime Minister , Razmara , Saudi , Saudi Arabia , Supplemental Agreement , United States

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