Majlis and Rahbord

Majlis and Rahbord

A Policy-oriented Analysis on Price Effect of Limitations on Petroleum Products Supply in Light of Modified Supply-Driven Social Accounting Matrix

Document Type : Research Paper

Authors
Ali Faridzad
Ali-Asghar Banouei
Farshad Momeni
Hamid Amadeh
Abstract
Petroleum products such as gasoline, gasoil and liquefied petroleum gas (LPG) are considered as essential goods some of which Iran is dependent on import to provide. Thus, under-supplying such strategic goods arguably leads to a decrease in production in other sectors, income reduction. In order to analyse this situation, it is improper to apply Social Accounting Matrix. Instead, this paper draws on a Modified Supply-Driven Social Accounting Matrix in particular contexts. At the same time, 2006 Energy-Carrier Social Accounting Matrix is applied.
The findings show that a price rise in petroleum products such as gasoline, gasoil and liquefied petroleum gas (LPG) mostly has a negative effect on Producer Price Index (PPI) in service, industry, and agriculture, respectively. Within these circumstances, rather than Cost of Urban Living Index, Cost of Rural Living Index will be negatively affected. But, with an increase in the price of gasoline, cost of living index of urban households is more than the cost of living index of rural households, and the increase in the price of gasoline and LPG has reverse impacts.
Keywords
Supply-Driven SAM
Supply Constraint Approach
Petroleum Products
Price