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Article
Publication date: 7 April 2015

Anatoliy G. Goncharuk

The purpose of this paper is to establish groups of stakeholders who win and lose from changes in natural gas prices and to develop practical recommendations for a state regulator…

Abstract

Purpose

The purpose of this paper is to establish groups of stakeholders who win and lose from changes in natural gas prices and to develop practical recommendations for a state regulator for the optimal setting natural gas prices in the domestic market through an example of Ukraine.

Design/methodology/approach

In this study, to identify groups of stakeholders with gains and losses from the pricing of natural gas, the author used traditional methods of correlation and statistical regression analysis, including the ordinary least squares (OLS) method.

Findings

The main profit from natural gas remains in the extraction sector. The remaining profit is distributed among the various stakeholders. The consumers during rapidly rising gas prices have to rely on energy efficiency and switching to alternative, less costly resources. The existing system of unified natural gas price for all industrial consumers is inefficient and leads to the losses of the largest industrial sectors in Ukraine – metallurgy and chemical industry. With the help of the developed models, the author determined the critical levels of natural gas prices for these two industries.

Research limitations/implications

The study is limited by data about activity of eight key manufacturing companies, four gas distribution companies, and main state gas companies from two country only.

Practical implications

Defined levels can be used by a state regulatory authority as a boundary, above which these industries will be unprofitable and their fate along with hundred thousands of workers will be questionable.

Originality/value

This is the first paper that set the critical levels of natural gas prices for two manufacturing industries in Ukraine.

Details

International Journal of Energy Sector Management, vol. 9 no. 1
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 11 September 2009

P.R. Shukla and Subash Dhar

India began gas imports since 2004 through liquified natural gas (LNG) route. Imports through trans‐country gas pipelines could help in bringing gas directly into the densely…

Abstract

Purpose

India began gas imports since 2004 through liquified natural gas (LNG) route. Imports through trans‐country gas pipelines could help in bringing gas directly into the densely populated Northern part of India, which are far from domestic gas resources as well as coastal LNG terminals. The purpose of this paper is to report scenarios, which quantify the impacts for India of regional cooperation to materialize trans‐country pipelines. The analysis covers time period from 2005 to 2030.

Design/methodology/approach

The long‐term energy system model ANSWER‐MARKAL is used for the analysis.

Findings

Trans‐country pipelines could deliver direct economic benefit of US$310 billion for the period 2010‐2030. Besides these, there are positive externalities in terms of lower greenhouse gas emissions and improved local environment, and enhanced energy security. However, the benefits are sensitive to global gas prices as higher gas prices would reduce the demand for gas and also the positive externalities from using gas.

Practical implications

Trans‐country pipelines are of great importance to India as they add 0.4 per cent to gross domestic product over the period besides yielding positive environmental externalities and improved energy security.

Originality/value

Quantification of benefits from trans‐country pipeline proposals till 2030.

Details

International Journal of Energy Sector Management, vol. 3 no. 3
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 1 April 1969

Colin Robinson

Suggests that both future supplies of, and the future demand for, North Sea Gas are highly uncertain. Gives examples to show that one can argue, with equal plausibility, that in…

Abstract

Suggests that both future supplies of, and the future demand for, North Sea Gas are highly uncertain. Gives examples to show that one can argue, with equal plausibility, that in the 1970s there could be either a significant shortage, or a substantial surplus of capacity relative to ‘premium’ gas demand. Argues that the uncertainty of the future demands a highly flexible marketing policy in which tariffs, with built‐in incentives to improve load factors, are aimed at keeping the market in balance and interruptible sales are one of the main marketing weapons. Sums up that this paper has tried to establish some guidelines for natural gas marketing policy in this country, working within some of the constraints which have already been established.

Details

European Journal of Marketing, vol. 3 no. 4
Type: Research Article
ISSN: 0309-0566

Keywords

Expert briefing
Publication date: 19 July 2016

US natural gas prices have surged over the past six weeks thanks to falling supply, strong demand from the power sector and rising exports. The uptick in prices has provided a…

Details

DOI: 10.1108/OXAN-DB212383

ISSN: 2633-304X

Keywords

Geographic
Topical
Article
Publication date: 3 April 2007

Jonathan P. Stern

The purpose of this paper is to investigate the continuing justification for linking the prices of European gas to those oil products.

Abstract

Purpose

The purpose of this paper is to investigate the continuing justification for linking the prices of European gas to those oil products.

Design/methodology/approach

The paper uses an analytic‐deductive approach supported by relevant analysis of data over a period of two decades.

Findings

Statistical analysis of the end‐uses of gas and oil products over the past two decades reveal that, with few exceptions, use of oil is increasing confined to transportation while gas is a utility fuel used to generate heat and power. The ability of end‐users to substitute oil products for gas – the principal justification for price linkage – has substantially diminished over the past two decades, and this trend is continuing. The implication of these findings is that nearly 20 percent of Europe's energy supplies are priced inappropriately with reference to a fuel which has little relevance to the supply/demand dynamics of natural gas. At levels of oil prices seen since 2003, this has significantly negative consequences for consumers. An important qualification to these findings is that in markets where prices have been set by gas to gas competition for many years – the UK and North America – a long‐term “natural correlation” between gas and oil prices has been observed.

Originality/value

The paper raises the important question facing European gas stakeholders and asks whether to remain with oil‐linked prices or move to spot market prices created at hubs in North West Europe.

Details

International Journal of Energy Sector Management, vol. 1 no. 3
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 1 April 2019

Damilola Felix Arawomo

This paper aims to examine the compatibility of Giffen behaviour with residential demand for kerosene and cooking gas.

Abstract

Purpose

This paper aims to examine the compatibility of Giffen behaviour with residential demand for kerosene and cooking gas.

Design/methodology/approach

In total, 600 questionnaires were administered on selected households in Ondo State while 485 were retrieved. Both ordinary least square and instrumental variables (IVs) were estimated, while, the IV estimated result was preferred.

Findings

The result showed that Giffen behaviour is compatible with the demand for kerosene in Ondo State, but not for cooking gas. As regard to other factors, prices of the alternatives to kerosene and cooking gas have positive but insignificant impact on the demand for the respective products. Age of the household has a positive significant impact on the demand for kerosene and cooking gas. Household in which the heads has tertiary education demand for kerosene and cooking gas more than those without any form of education. Larger households consume more of both commodities than smaller households.

Research limitations/implications

Based on these findings, the authors recommend that government should continue to subsidize either the production or consumption of household kerosene.

Practical implications

Consumers should not mind the initial expenditure in purchasing cylinder for cooking gas as subsequent expenditure would be lower than that of kerosene.

Social implications

Regulators should brace to ensure that kerosene and cooking gas be made available at government-regulated prices, particularly by checkmating the activities of the “black-marketers.”

Originality/value

Two outstanding knowledge gaps that this paper filled are in the novelty of this paper regarding the application of Giffen behaviour to kerosene and cooking gas. Second, previous studies did not account for the potential endogeneity problem that is inherent in the joint demand for kerosene and cooking gas. This paper took care of this by estimating the model using IVs.

Details

International Journal of Energy Sector Management, vol. 13 no. 1
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 20 March 2007

John Cita, Soojong Kwak and Donald Lien

To evaluate various hedge programs designed to minimize the risk of an extreme monthly gas bill subject to a pre‐determined hedge program budget.Design/methodology/approach

Abstract

Purpose

To evaluate various hedge programs designed to minimize the risk of an extreme monthly gas bill subject to a pre‐determined hedge program budget.Design/methodology/approach – Historical data were collected on natural gas spot and futures prices. Also, theoretical options prices were calculated. These data were then applied to derive the risk associated with extreme bills under different hedge strategies.Findings – In every instance, having a price cap hedge program is better for core customers of a utility company than not having a hedge program.Research limitations/implications – The better hedge performance is based on historical data. It may not apply to future scenarios. Also, the theoretical options prices may need refinements.Practical implications – Any utility company should seriously consider a price cap hedge program to protect its core customers. The exact program design will likely change but the basic principles and methods described in this paper are directly applicable.Originality/value – This paper provide/guidelines for a utility company to design its hedge programs for the benefits of core customers. Currently, there is no such guideline available and there is no study evaluating these hedge programs. This paper provides a first attempt.

Details

Managerial Finance, vol. 33 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 22 June 2012

Kathleen Arano and Marieta Velikova

The US natural gas industry has gone through regulatory changes and consequently restructuring over the last 40 years, in an effort to be more market driven. The purpose of this…

374

Abstract

Purpose

The US natural gas industry has gone through regulatory changes and consequently restructuring over the last 40 years, in an effort to be more market driven. The purpose of this paper is to present an economic analysis of price cointegration in the US natural gas industry as a result of industry restructuring.

Design/methodology/approach

In particular, this paper tests if access to the same major pipeline transportation corridor translates to cointegration of residential natural gas prices.

Findings

Results indicate a high degree of cointegration for States within the same transportation corridor and a greater percentage of State residential prices are cointegrated post the period of full wellhead deregulation (post 1993) versus the transitional period (1989‐1992). In fact, within the Southwest to Southeast transportation corridor, 100 percent of the price‐pairs examined were cointegrated.

Originality/value

The paper shows that the combination open access as a result of restructuring, complemented with an expansive and integrated transportation and distribution network, have likely increased the overall efficiency in the industry.

Details

International Journal of Energy Sector Management, vol. 6 no. 2
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 8 May 2018

Abdulazeez Y.H. Saif-Alyousfi, Asish Saha and Rohani Md-Rus

The purpose of this paper is to examine and compare the impact of oil and gas prices shocks on the non-performing loans (NPLs) of banks at the aggregate as well as at the level of…

1138

Abstract

Purpose

The purpose of this paper is to examine and compare the impact of oil and gas prices shocks on the non-performing loans (NPLs) of banks at the aggregate as well as at the level of commercial and Islamic banks in Qatar over the period 2000-2016.

Design/methodology/approach

Using the West Texas Intermediate Database, BankScope Database, World Bank’s World Development Indicators Database, and International Monetary Fund Database, the authors use a one-step system generalized method of moments dynamic model to examine and compare the association between oil and gas prices shocks with NPLs in Qatari banks. The authors also test the hypotheses of direct and indirect impacts of oil price shocks and gas price shocks on bank NPLs.

Findings

The results indicate that oil price shocks and gas price shocks do not have directly affect NPLs of Qatari banks at the aggregate level, while they have indirect effects that are channeled through the country-specific macroeconomic and institutional factors. The authors find that oil and gas prices shocks affect NPLs of Qatari Islamic banks directly through extended oil and gas-related cash flows, while their impact on the NPLs of Qatari commercial banks is indirect. In other words, Islamic banks in Qatar greatly benefits from increased cash flow caused by the rise in the oil and gas prices, which make their NPLs, much lower than that in commercial banks. Better capital cushion, better managerial efficiency, better risk management, and liquidity management systems should be used by the Islamic banks in Qatar to expand their customer base. The authors also find that positive fiscal stance of the government reduces the NPLs in both commercial and Islamic banks.

Practical implications

The results of this study necessitate policy measures that can counter the effects of changes in oil and gas prices on the growth of bank NPLs.

Originality/value

It is widely recognized that oil and gas prices and the level of production are of great importance to the economic development of oil and gas-exporting countries. So far, however, no econometric study has been reported in the literature which analyses and compares the impact of oil and gas prices shocks on the NPLs of commercial and Islamic banks and also at the aggregate level in any of the oil economies. Thus, this study provides the first empirical evidence on distinct direct and indirect channels through which oil and gas prices shocks may affect bank NPLs.

Details

International Journal of Bank Marketing, vol. 36 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 13 May 2014

Audhesh K. Paswan, John C. Crawford, Waros Ngamsiriudom and Thuy Nguyen

The aim of this study is to investigate the impact of increase in price of an essential product (i.e. gasoline) toward the focal product and other seemingly non-related products…

1356

Abstract

Purpose

The aim of this study is to investigate the impact of increase in price of an essential product (i.e. gasoline) toward the focal product and other seemingly non-related products.

Design/methodology/approach

A self-administered survey was used to collect data from the drivers at a large metroplex in Southwest USA. Multiple regression and scanning electron microscope procedures were used to analyze and test the proposed hypotheses.

Findings

When consumers notice the increase in gas prices, they become very anxious. This anxiety is positively associated with average gas bought in gallons and negatively associated with threshold price. Further, this consumer anxiety has the strongest influence on lifestyle changes, followed by automobile technology change and transportation mode change, and has the weakest influence on gasoline brand/type change.

Research limitations/implications

We focus on only anxiety as a mediator between increase in gas prices and the behavioral outcomes, and collect data from only one location.

Practical implications

Managers must be cognizant that a price increase in essential goods not only influences the demand for focal products but also for products that may not seem related to the focal products.

Social implications

Increase in gasoline price will not only affect the demand for gasoline, but also the demand for alternate forms of transportation, fuel efficient vehicles, and other aspects of life.

Originality/value

This study is the first to look at the role of anxiety as a mediator and looks at the effects of increase in gas prices in a holistic manner.

Details

Journal of Product & Brand Management, vol. 23 no. 3
Type: Research Article
ISSN: 1061-0421

Keywords

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