Assessment and Prioritization of Alternative Gasoline Pricing Policies in Iran based on Economic, Social and Environmental Criteria

Abstract

The main purpose of this study is to identify and prioritize different gasoline pricing policies in Iran based on sustainable development indicators using the Delphi method and Analytical Hierarchy Process (AHP). To this end, first, various types of gasoline pricing options along with evaluation indicators of these options were extracted separately in economic, social, and environmental terms by the Delphi method based on reviewing studies and interviews with specialists and experts. In this section, four pricing options for gasoline pricing were extracted entitled (i) “Double pricing of gasoline or continuation of the current trend; (ii) “Single rate gasoline price and cash payment of subsidies to cars; (iii) “Proportional pricing for gasoline consumption; (iv) “Single price of gasoline and allocation of quotas to people instead of cars. Then, these options were evaluated and prioritized in terms of economic, social, and environmental indicators in the framework of the AHP method. The results show that pricing commensurate with gasoline consumption or consumption tax (third option) is the best pricing option among the mentioned options. In this option, environmental and economic indicators are of great importance, and the price of gasoline between the quota price and FOB is determined in proportion to the consumption of individuals and sudden price changes do not occur for all consumers and the price of gasoline is completely dependent on the consumption behavior of individuals. Thus high consumption is always faced with higher taxes and allows for a fairer distribution of subsidies and reduced smuggling incentives for this fuel.

Keywords

• energy pricing
• gasoline
• sustainable development
• delphi method
• analytical hierarchy process