The Effect of Natural Gas Price liberalization on Natural Gas Consumption in Residential sector in Iran

Abstract

The Balance between demand and supply of energy carriers is an important issue. Price liberalization of natural gas is one of the best solutions to reduce natural gas consumption so we investigated this matter in our study. In this study use of autoregressive distributed lag model and error correction model model and results indicated that in first scenario (2011-13) annual growth of consumption will be 2.7 percent and its second scenario (2011-15) annual growth of consumption will be 4.2 percent. In first scenario annual consumption will be 36258.56, 36075.51 and 37352.13 million cubic meter respectively and in second scenario will be 37965.73, 38003.13, 39414.1, 41454 and 43931.57 13 million cubic meter respectively. Predict that liberalization in first and second scenario will be decrease 29.19 and 37.21 milliard cubic meter of total consumption in these years respectively.

Keywords: liberalization, autoregressive distributed lag, error correction, natural gas