Ceiling Price Policy in Iranian Energy Carriers Market
Subject Areas : Futurology
H. Bastanzad
1
(ندارد)
Keywords:
Abstract :
The process of Price Setting in Market for goods &Services along with the phenomenon of price ceiling in production factors market with distort the equilibrium & result in price gap in the economy, which in turn generates excess demand & necessitate the permanent sources of finance (Subsidy) for its satisfaction, failing which may lead to budget deficit & embarrass the maintenance of policy execution. The energy Carriers are part of those goods which are subject to price ceiling since last three dacades in order to protect the final consumers & producers from the menace of hike in general level of prices. But however such policy may not persist for along time because of chronic constraints of resources that made the opportunity cost of this policy so significant. In this paper an attempt is made to analyse the impact of price adjustment of energy carries in the aim of financing the budget deficits, in contrast to alternative policy of borrowing from the banking system to maintain the price ceiling. Moreover we have tried to postulate the income & inflationary effects of price adjustment in energy sector.