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The effect of petroleum products price increases on the aggregate cost of living by input-output method- The case of Iran

By: Contributor(s): Series: Bakhtiar, Mohsen ; Description: 4 pDDC classification:
  • CD W938 1 0013960
In: v. 5, p. 154Summary: Resumen del autor, extraído del trabajo. Petroleum product prices in the Islamic Republic of Iran have for several years been below opportunity costs as measured by border prices. In recent years the Government has increased energy prices, but they are still very substantially below opportunity costs. Energy efficiency improvement policy and investment requirements motivate the Government to increase the energy prices to the border levels, which are 750, 500, 500 and 300 Rls/liter for gasoline, kerosene, gas oil and fuel oil respectively. This paper considers the inflationary impacts of raising the 1999/20001 year petroleum products prices to target prices in 2000/2001, while near to border prices by 114, 400, 400, and 500 percent increases in gasoline, kerosene, gas oil and fuel oil respectively. These price increases would have social impacts from the effects of increasing household energy and non-energy expenditure. Input-output table provides a useful framework for analyzing the direct and indirect impacts of energy price increases through inter-industry activities, which 1994/95 Iranian input-output table would be consider in this paper. The theory that is used is based on the price equations of input-output models and it should be considered energy and non-energy separately as well as final energy prices are exogenous. Using the method described above, the impact of energy price changes are calculated to have, in the absence of any reaction by labor and other factor prices, the effects on the prices of final goods.
Item type: Congresos (trabajos presentados)

Resumen del autor, extraído del trabajo. Petroleum product prices in the Islamic Republic of Iran have for several years been below opportunity costs as measured by border prices. In recent years the Government has increased energy prices, but they are still very substantially below opportunity costs. Energy efficiency improvement policy and investment requirements motivate the Government to increase the energy prices to the border levels, which are 750, 500, 500 and 300 Rls/liter for gasoline, kerosene, gas oil and fuel oil respectively. This paper considers the inflationary impacts of raising the 1999/20001 year petroleum products prices to target prices in 2000/2001, while near to border prices by 114, 400, 400, and 500 percent increases in gasoline, kerosene, gas oil and fuel oil respectively. These price increases would have social impacts from the effects of increasing household energy and non-energy expenditure. Input-output table provides a useful framework for analyzing the direct and indirect impacts of energy price increases through inter-industry activities, which 1994/95 Iranian input-output table would be consider in this paper. The theory that is used is based on the price equations of input-output models and it should be considered energy and non-energy separately as well as final energy prices are exogenous. Using the method described above, the impact of energy price changes are calculated to have, in the absence of any reaction by labor and other factor prices, the effects on the prices of final goods.



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