Strategic Importance of Natural Gas and Necessity of Management and Reform on its Consumption Pattern

In modern times, not only economic development, but continuation of life depends on energy. In today's world, energy is provided by various resources, such as oil, gas and renewable energies. Therefore, due to the strategic importance of energy in economic development and social welfare and given the limited volume of energy resources, especially natural gas, it is necessary to manage proper consumption of such valuable resources as natural gas in order to avoid an energy crisis in the near future.The present study, will discuss the latest situation of natural gas reserves, production and consumption of in the world as well as in Iran, and factors consumption, including gas price, people’s income, and number of subscribers are reviewed.For this purpose, the annual data for the period of 1981-2008, and the ordinary least squares method is used. The results indicate that natural gas is an essential item in households consumption basket with the income elasticity of gas consumption standing at about 32% and the price elasticity of demand for gas amounting to about 57%. Findings also show that one percent increase in the number of gas subscribers will increase consumption by 0.68%.It seems that if in the absence of proper management and control on gas consumption, the country will face unimaginable problems in the near future. Therefore, it is imperative to optimize gas consumption. This paper explains the necessity of gas price adjustment while recommending the use of cultural mechanisms and other incentives to achieve that goal.