Modeling and forecasting demand for petrochemical products of Persian Gulf Petrochemical Industries Company (PGPIC)

This article models and forecasts the domestic and exports demand  of products of Persian Gulf Petrochemical Industries Company (PGPIC) using a dynamic panel data model. The model is estimated using GMM method and domestic and export price index, the quantity demanded ​​of the company's products, the global price index of alternative products and the income of demandant companies for the PGPIC's products during the period 2004-2017. The price and income elasticity of demand for domestic demand function are -2.13 and 0.20, respectively indicating that domestic demand of the company’s products are elastic and necessary normal goods and there are substitutes for them. For the export demand function, the income elasticity of demand is 2.39 showing that the company's products are normal and luxurious goods for foreigners and there are more substitutes for PGPIC’s products in export markets. In order to maximize the company's revenue, lower prices should be applied to its products in the domestic and export markets. Also, the forecasting results of total domestic and foreign demand of the PGPIC’s petrochemical products indicates an increasing trend in the coming years.Therefore, appropriate planning should be done to provide necessary infrastructure to increase production capacity in the Persian Gulf Petrochemical Company.