AN ECONOMETRIC INVESTIGATION OF PRODUCER PRICE IMPACT ON GAS RESERVES IN REGULATED UPSTREAM SECTOR OF PAKISTAN

The wellhead natural gas price is the key determinant of gas production in a regulated upstream sector. This study identifies the relationship between gas production and its price through empirical analysis using time series data for Pakistan. Cointegration and error correction model and Granger causalityThe study finds that the natural gas reserves in Pakistan upstream sector respond positively to international crude price and domestic wellhead gas price with price elasticity greater than 1 in case of gas price to reserves addition.