Effect of Targeted Subsidies on Natural Gas Consumption of Residential Sector in Tehran Raeiszadeh Mohammad Alia, Monjazeb Mohammad Rezab aM.S. Student, Faculty of Economics, University of Economic sciences, Iran bAssistant Professor, Faculty of Economics, University of Economic sciences, Iran Online published on 15 April, 2014. Abstract All energy indexes such as the intensity, efficiency, and the energy coefficient indicate the indiscriminate use of energy carriers and especially the gas consumption in Iran. Also, from the point of view of subsidizing the energy carriers is located at the first rank in the world. With about 24 billion dollars paid in 2011, Iran has had the highest cost of the natural gas subsidy. This kind of subsidy not only causes the indiscriminate and inefficient use of energy, it has led to the unequal distribution of subsidies too; because the people with higher incomes can benefit from additional subsidies. Therefore, to overcome these problems and to transfer the subsidy from consumption sector to the manufacturing sector, the targeted subsidy plan was implemented in 2010. The aim of this investigation is to consider the impact of the project on the residential natural gas consumption of Tehran. The results show that the targeted subsidy plan caused the reduction of residential natural gas consumption. Top Keywords Natural gas consumption, Targeted subsidy plan, Price elasticity of demand. Top |