Simulating the role of subsidies reform in fuel consumption by system dynamics approach

Document Type : Research Article

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Abstract

This article has tried to simulate the fuel consumption and the assigned subsidies to this sector. For the aim of simulation, first we have identified the influential factors in fuel pricing including assigned subsidies to this sector, and then the influential factors in fuel consumption. The relation between different variables is shown by causal diagrams using system dynamics approach. Then the research model is simulated and analyzed by Vensim DSS. The results showed that fuel consumption will have an ascending trend in the period of 35 years. and decrease in consumption due to decreasing fuel subsidies will happen just in short time. sensivity analysis showed that budget shortage is an important factor in shaping the fluctuations of the fuel subsidies. At the end for the aim of forcasting consumption behavior in future different scenarios such as reducing the subsidies in 25 and 50 percent are examined and results are discussed.

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