Energy and the economy in oil-exporting countries: general-equilibrium analysis and application to Venezuela

Thesis/Dissertation · Thu Jan 01 04:00:00 EST 1987

OSTI ID:6433627

Smith-Perera, R E

A key energy-policy dilemma faced by many oil-exporting countries concerns how to allocate energy resources between exports and domestic use. Standard economic analysis recommends border energy pricing as the optimal solution, given no distortions elsewhere. However, distortions in oil-exporting countries, such as monopoly power in export markets, oil quotas, import tariffs, capacity constraints in domestic energy supply, and import restrictions, have direct consequences on the efficient pricing and use of energy resources. We develop an economy-wide optimization model of an oil-exporting country focusing on optimal resource allocation, which is used to calculate the optimal energy prices in the presence of several distortions. The model is used to estimate the optimal prices for oil products, natural gas, and electricity in Venezuela, and to evaluate the impacts of energy price adjustments on energy consumption and the overall economy. It was found that subsidies in the domestic energy market have been extremely large and that a substantial reduction, but not elimination, of the subsidies would bring large benefits to the economy. The approach offers a general methodology for energy pricing policy analysis in oil-exporting countries that can be used in practical applications.

• Research Organization: Harvard Univ., Boston, MA (USA)
• OSTI ID: 6433627
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002 -- Energy Planning & Policy-- Petroleum
ALLOCATIONS
DEVELOPING COUNTRIES
ECONOMIC IMPACT
ENERGY MODELS
ENERGY POLICY
FINANCIAL INCENTIVES
GOVERNMENT POLICIES
LATIN AMERICA
OIL-EXPORTING COUNTRIES
OPTIMIZATION
PRICES
RESOURCES
SOUTH AMERICA
SUBSIDIES
VENEZUELA