Institutional Analysis of Iran's Liquefied Petroleum Gas (LPG) Industry with an Emphasis on providing Implications for Reforming the Industry's Value Chain

Document Type : applicative

Authors

1 Professor, Department of Energy Economics, Faculty of Islamic Studies and Economics, Imam Sadiq University, Tehran, Iran.

2 Associate Professor, Department of Energy Economics, Faculty of Islamic Studies and Economics, Imam Sadiq University, Tehran, Iran

3 Professor, Department of Operations Management and Productivity, Faculty of Islamic Studies and Management, Imam Sadiq University, Tehran, Iran

4 PhD Candidate in Economics, Faculty of Islamic Studies and Economics, Imam Sadiq University, Tehran, Iran.

10.30473/jier.2025.75316.1503

Abstract

This study was conducted with the aim of institutional analysis of Iran's liquefied petroleum gas (LPG) industry and providing implications for reforming its value chain structure, using the Institutional Analysis and Development (IAD) framework and a qualitative approach. Data were collected through 14 semi-structured interviews with industry experts and analyzed using thematic analysis. The findings indicate that inefficient rules, the absence of an independent regulatory body, weaknesses in storage and export infrastructure, and poor coordination among key actors have led to the emergence of an unstable and opportunity-wasting action arena within the industry. The consequences of this institutional setting can be categorized into three levels: economic (resource waste, reduced productivity), social (inequality in access, public distrust), and institutional (conflict of interest, reproduction of inefficiency). In the extracted conceptual model, the interaction of three key variables—biophysical conditions, community attributes, and formal and informal rules—is explained in shaping institutional action and generating negative outcomes. In conclusion, a set of policy implications is proposed for reforming the LPG value chain, with emphasis on redesigning institutional rules in resource allocation, financing, and pricing; restructuring licensing systems, incentives, and entry into downstream segments; establishing specialized institutions for policymaking, energy diplomacy and market analysis; and enhancing monitoring, transparency, and accountability in project implementation; and institutionalizing governance that is expert-driven, forward-looking, and resilient to crises.

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Main Subjects


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