Economic Modeling of the Impacts of Natural Gas Imbalance on the Value Added of Various Economic Sectors in Iran

Authors
Mohammad Sayadi 1
Hamed Heidarian 1
Sajad Rajabi 2
1 Kharazmi University
2 Imam Sadiq University
Abstract
Natural gas is currently the most important energy carrier in Iran’s production and consumption mix, and its share is expected to increase in the coming years. Any imbalance in the supply and demand of this key energy source can have significant effects on the value added across various economic sectors. The main objective of this study is to analyze the impact of natural gas imbalances on sectoral value added and Iran’s gross domestic product (GDP), using an updated input–output model based on 2023 data. Four scenarios are considered: (1) no prioritization of sectors under imbalance conditions; (2) prioritization based on social and political considerations; (3) no prioritization along with the absence of consumption management policies; and (4) a combination of social-political prioritization with lack of consumption control policies. The results indicate that sectors such as “chemical products manufacturing,” “natural gas production and distribution,” and “electricity generation and distribution” suffer the most significant declines in value added, output, and employment due to their direct and indirect dependence on natural gas. In contrast, sectors like “motor vehicle manufacturing” and “poultry farming,” which are minimally dependent on gas, experience relatively lower economic losses. Moreover, under the second scenario (12% imbalance without affecting final demand), GDP in 2041 is projected to decline by about 3% more compared to the third scenario (21% imbalance with uniform impact across all sectors).
Keywords
Natural gas
imbalance
Gross Domestic Product
Iranian Economy
economic value added
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