The Estimation of Natural Gas Demand Function (Province Comparison Analysis)

Iran by having 15 percent of the world natural gas reservoirs is in the second rank after Russia. Having so many natural gas reservoirs doesn't mean that we are allowed to use this energy in an excessive manner.

In this study, factors affecting natural gas consumption were investigated in 15 provinces of the country during 2001–2010. It was found that the number of consumers, natural gas price, electricity price, real per person's income, CDD and HDD are effective on it. Then, they were used in an econometric model by panel and seasonal data for estimation.

The results show that natural gas price has negative effect on natural gas consumption while numbers of consumers, real per person's income and CDD have positive effect. Moreover, electricity price and HDD do not affect it significantly. It also became clear that the provinces of Semnan and Isfahan have the lowest and highest consumption respectively.