The Effects of Iran's Reallocating its Oil and Gas Sales Revenues to Developing its Upstream Affairs

Farahnak, Fardin; Maddah, Majid; Shakeri, Abbas

doi:10.22099/ijes.2018.28032.1460

Document Type : Research Paper

Authors

¹ Department of Economics, , University of Semnan, Semnan, Iran.

² Department of Economics, , University of Allame-Tabatabaei, Tehran, Iran.

https://doi.org/10.22099/ijes.2018.28032.1460

Abstract

Oil and Gas sector, with notable participation in national product and funding public expenditures, plays a seminal role in Iran's economy. Although there is a relative lag in providing proportionate supply, Iran stands at the highest rank of owning world's related proven reserves. Using a Computable General Equilibrium (CGE) model, this study was aimed to investigate the effects of the increase in the acquisition rate of Iran's oil and gas upstream affairs from oil revenues on GNP and public budget, which are supposed to help the government keep its main obligations often funded from oil revenues.
By applying the 18% gain, instead of the current 14.5%, to the oil and gas upstream affairs, short-run recession against long-run booming effects would emerge. Accordingly, maintaining the initial level of either the Public Goods and Services (PGS) output or Government Financial Supports on PGS, GNP could boost up to 5% with over 15% of required contraction in the public budget. On the contrary, maintaining the initial level of either the Transfer Payments or Transfer Payments and Financial Supports on PGS (simultaneously), GNP would rise only 1%, due to the negligible required contraction in the public budget. Therefore, allocating more oil revenues to developing upstream affairs (even under the presence of the contemporary main obligations) is recommended due to its potential to spur notable growth in GNP.

Keywords

Article Title [Persian]

آثار بازتخصیص درآمد فروش نفت و گاز ایران به توسعه امور بالادستی آن

Authors [Persian]

فردین فرحناک ¹
مجید مداح ¹
عباس شاکری ²

¹ گروه اقتصاد، دانشگاه سمنان، سمنان، ایران

² گروه اقتصاد، دانشگاه علامه طباطبائی، تهران، ایران.

Abstract [Persian]

بخش نفت و گاز با سهم قابل توجه در تولید ملی و تامین هزینه‏های عمومی نقش مهمی را در اقتصاد ایران ایفا می‏کند. علیرغم، عقب ماندگی در تأمین سهم متناسب از عرضه جهانی، ایران در بالاترین رتبه از حیث ذخایر اثبات شده جهانی مرتبط قرار دارد. این تحقیق با استفاده از یک مدل CGE، به بررسی اثرات افزایش سهم امور بالادستی نفت و گاز از درآمدهای نفتی، بر تولید ناخالص ملی و بودجه عمومی مشروط به حفظ تعهدات اصلی دولت که اغلب از درآمدهای نفتی تامین می‏شود، می پردازد.
با افزایش سهم 18 درصد از درآمد نفت و گاز به جای 14.5% کنونی، در کوتاه مدت رکود و درمقابل در بلند مدت رونق رخ خواهد داد. بر این اساس، با حفظ سطح اولیه؛ 1- ستانده کالاها و خدمات عمومی، یا 2- میزان حمایت مالی دولتی در تأمین کالاها و خدمات عمومی، GNP همگام با انقباض 15٪ در بودجه عمومی می‏تواند تا 5٪ افزایش یابد. در مقابل، با حفظ سطح اولیه؛ 3- پرداخت‏های انتقالی یا 4- حفظ همزمان پرداختهای انتقالی و حمایت مالی از تأمین کالاهای عمومی، ضمن الزام به انقباض بسیار ناچیز بودجه عمومی برای دولت GNP تنها 1٪ افزایش می‏یابد. بنابراین، با توجه به پتانسیل رشد چشمگیر GNP، پیشنهاد می‏شود که بازتخصیص سهم بیشتری از درآمد نفتی برای توسعه امور بالادستی آن (حتی بشرط حفظ تعهدات کنونی دولت) اجرایی شود.

Keywords [Persian]

نفت و گاز
بودجه عمومی
CGE
GNP

References

References

Alshehabi, O. H. (2012). Energy and labour reform: Evidence from Iran. Journal of Policy Modeling, 34(3), 441-459.

Alshehabi, O. H. (2013). Modelling energy and labour linkages: A CGE approach with an application to Iran. Economic Modelling, 35, 88-98.

Azadi, A. K., & Yarmohammad, M. H. (2011). Analysis of Iran's crude oil export future capacity. Energy Policy, 39(6), 3316-3326.

Central Bank of Iran. (2017). Annual Review 2016/17. Retrieved from: https://www.cbi.ir/simplelist/AnnualReview_en.aspx.

Corden, W. M. (1984). Booming sector and Dutch Disease economics: Survey and consolidation. Oxford Economic Papers, 36(3), 359-380.

Dadgar, Y., Nazari, R. a., & Mehrabani, F. (2008). The impact of fiscal policy and gas price shock on welfare and income distribution in Iran. Social Welfare, 7(28), 129-150.

Dahmardeh, N., Shahraki, M., & Ghaderi, S. (2012). A study of the impact of saving on macroeconomic variables in Iran (CGE Model). International Journal of Economics and Finance, 4(2), 204.

Devarajan, S. (1988). Natural resources and taxation in computable general equilibrium models of developing countries. Journal of Policy Modeling, 10(4), 505-528.

Doulah, A., & Shafee, M. (2016). Study of the legal regime of oil and gas transit in energy charter treaty and law of Iran. Journal of Politics and Law. 9, 194.

Dowling, G. R. (2004). A commentary on hunt and arnett's paper: market segmentation strategy, competitive advantage, and public policy: Grounding segmentation strategy in resource-advantage theory. Australasian Marketing Journal , 12(1), 30-31.

Dudlák, T. (2018). After the sanctions: Policy challenges in transition to a new political economy of the Iranian oil and gas sectors. Energy Policy, 121, 464-475.

Dudley, B., & Dale, S. (2017). BP Statistical Reviewof World EnergyJune 2017. London: BP Retrieved from: https://www.bp.com/content/dam/bp/en/corporate/pdf/energy-economics/statistical-review-2017/bp-statistical-review-of-world-energy-2017-full-report.pdf.

Farajzadeh, Z., & Bakhshoodeh, M. (2015). Economic and environmental analyses of Iranian energy subsidy reform using computable general equilibrium model. Energy for Sustainable Development, 27, 147-154.

Farzanegan, M. R., & Markwardt, G. (2009). The effects of oil price shocks on the Iranian economy. Energy Economics, 31(1), 134-151.

Ferguson, C. E., & Maurice, S. C. (1978). Economic Analysis: Theory and Application: McGraw-Hill/Irwin.

Gylfason, T. (2006). Natural resources and economic growth: From dependence to diversification. In Economic liberalization and integration policy (pp. 201-231): Springer.

Hafezi, R., Akhavan, A., & Pakseresht, S. (2017). Projecting plausible futures for Iranian oil and gas industries: Analyzing of historical strategies. Journal of Natural Gas Science and Engineering, 39, 15-27.

Hendrischke, H. (2013). The Political Economy of China's Provinces: Competitive and Comparative Advantage: Routledge.

Holtberg, P. D., Beamon, J. A., Schaal, A. M., Ayoub, J., & Turnure, J. T. (2018). Annual energy outlook 2018. Retrieved from: http://www.iranwatch.org/sites/default/files/eia_report.pdf

Hosoe, N., Gasawa, K., & Hashimoto, H. (2010). Textbook of computable general equilibrium modeling: programming and simulations: Springer.

Hunt, S. D., & Morgan, R. M. (1995). The comparative advantage theory of competition. The Journal of Marketing, 1-15.

Maddah, M., Berijanian, M. M., & Ghazizadeh, M. S. (2018). Analysis of electricity generation’s externalities on sectorial output growth and welfare in Iran. Iranian Journal of Economic Studies, 6(1), 109-127.

Mehrara, M. (2008). The asymmetric relationship between oil revenues and economic activities: The case of oil-exporting countries. Energy Policy, 36(3), 1164-1168.

Mirimoghadam, M., & Ghazinoory, S. (2017). An institutional analysis of technological learning in Iran's oil and gas industry: Case study of south Pars gas field development. Technological Forecasting and Social Change, 122, 262-274.

Moshiri, S., & Hayati, S. (2017). Natural resources, institutions quality, and economic growth: A cross-country analysis. Iranian Economic Review, 21(3), 661-693.

Porter, M. E. (2011). Competitive advantage of nations: creating and sustaining superior performance (Vol. 2): Simon and Schuster.

Sadeghi, M., & Hosseini, H. M. (2006). Energy supply planning in Iran by using fuzzy linear programming approach (regarding uncertainties of investment costs). Energy Policy, 34(9), 993-1003.

Shahnoushi, N., Danesh, S., Daneshvar, M., Moghimi, M., & Akbar, B. (2012). Welfare and environmental quality impacts of green taxes in Iran: A computable general equilibrium model. African Journal of Business Management, 6(9), 3539-3545.

Torvik, R. (2001). Learning by doing and the Dutch disease. European Economic Review, 45(2), 285-306.

Wall Street Journal (2016). Cost of producing a barrel of oil and gas. Retrieved from: http://graphics.wsj.com/oil-barrel-breakdown/

Wing, I. S. (2004). Computable general equilibrium models and their use in economy-wide policy analysis. Technical Note, Joint Program on the Science and Policy of Global Change, MIT.

Wing, I. S. (2007). Computable general equilibrium models for the analysis of energy and climate policies. Prepared for the International Handbook of Energy Economics.

Wolf, C. (2009). Does ownership matter? The performance and efficiency of State Oil vs. Private Oil (1987–2006). Energy Policy, 37(7), 2642-2652.

The Effects of Iran's Reallocating its Oil and Gas Sales Revenues to Developing its Upstream Affairs

References

References

Volume 7, Issue 2 - Serial Number 14December 2018Pages 219-237

Volume 7, Issue 2 - Serial Number 14
December 2018
Pages 219-237