Network ownership and optimal tariffs for natural gas transport
Working paper
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http://hdl.handle.net/11250/162836Utgivelsesdato
2004-10Metadata
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- Discussion papers (SAM) [662]
Sammendrag
This paper addresses the issue of national optimal tariffs for transportation
of natural gas in a setting where national gas production in its entirety
is exported to end-user markets abroad. In a situation where the transportation
network is owned altogether by a vertically integrated national gas producer, it is
shown that the optimal tariff depends on the ownership structure in the integrated
transportation company as well as in the non-facility based gas company. There are
two reasons why it is possibly optimal with a mark-up on marginal transportation
costs. First, there is a premium on public revenue if domestic taxation is distorting.
Second, with incomplete national taxation of rents from the gas sector, the transportation
tariffs can serve as a second best way of appropriating rents accruing to
foreigners. In a situation where the network is run as a separate entity subject to
a rate of return regulation, it will be optimal to discriminate the tariffs between
shippers for the usual Ramseyean reasons.
Utgiver
Norwegian School of Economics and Business Administration. Department of EconomicsSerie
Discussion paper2004:27