Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1029895 | Energy Strategy Reviews | 2013 | 6 Pages |
Demand for natural gas in most countries of the Middle East and North Africa (MENA) region has, since the start of the 2000s, been growing at a much faster rate than supply, resulting in a costly deficit. The issue of domestic gas prices, which are kept at artificially-low levels by MENA governments, is a key feature of the region's gas supply–demand picture.This contribution analyses the political economy logic informing domestic gas pricing policies in the MENA region and argues that unless these are revised to take account of the new regional gas market realities, MENA's role in international gas markets will in future be more that of a growing demand and import centre than as a major source of new supply. It argues that, in spite of its limitations and short-term failures, the recent Iranian pricing reform experiment is a useful case study from which lessons can be learnt for other countries in the region.
► Artificially-low domestic gas prices are no longer sustainable in most MENA countries. ► Without price reforms, MENA's gas export potential will remain constrained. ► Policymakers are increasingly aware of the need to rethink gas pricing policies. ► High-priced imports are politically more palatable than higher domestic prices. ► Governments should learn from pricing reformexperiments in other countries.