Pricing Liquid Petroleum Gas in Mexico
AbstractThis paper considers the regulation of pricing of liquid petroleum gas in Mexico. We construct a model that incorporates all information essential to the pricing question and derive relationships that should hold between prices in Mexico and prices in world markets. Prices in Mexico can be tied to the readily observable prices in the United States by a netback rule. However, this rule can lead to incentives to increase the price of domestic liquid petroleum gas by diverting production from the regulated market.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 66 (2000)
Issue (Month): 3 (January)
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- Dagobert L. Brito & Juan Rosellón, 2010.
"Lumpy Investment in Regulated Natural Gas Pipelines: An Application of the Theory of the Second Best,"
Discussion Papers of DIW Berlin
1024, DIW Berlin, German Institute for Economic Research.
- Dagobert Brito & Juan Rosellón, 2011. "Lumpy Investment in Regulated Natural Gas Pipelines: An Application of the Theory of the Second Best," Networks and Spatial Economics, Springer, vol. 11(3), pages 533-553, September.
- Ramirez, Jose Carlos & Rosellon, Juan, 2002. "Pricing natural gas distribution in Mexico," Energy Economics, Elsevier, vol. 24(3), pages 231-248, May.
- Rosellon, Juan, 2008. "Policy Research Supporting Policy Making: The CIDE-CRE Agreement," MPRA Paper 22419, University Library of Munich, Germany.
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