What is the effect of putting price caps on an important commodity like gas?
Price of energy products like gas must reflect their economic value. The user must pay. Although capping the prices of products is expected to be in the interest of consumers, it has its adverse effects. Energy planners are happy that over the last 3-4 years, the worlds energy elasticity to GDP is dropping, a phenomenon true for many countries. High prices are leading to technological advancements resulting in efficiency. This desired trend would be missing in territories where consumers are not facing high global prices due to artificial caps, resulting in poor economic efficiency, trade and fiscal imbalances. What then can the government do for equitable distribution of resource? Natural gas is a premium energy source and has much wider applications than any other hydrocarbon or fossil fuel product. The supply deficit is likely to exist. Resultantly those consumers who value the product most would be ready to pay more for the fuel. For needy consumers with low ability-to-pay, the Gov
