Template-Type: ReDIF-Article 1.0
Author-Name:  Christian Dufournaud
Author-Name:  Carlos Raul Gutierrez
Author-Name:  Lodetrijk Berlage
Author-Name:  Peter P. Rogerst
Title:  Long-Term Contracts for Crude Oil imports into Costa Rica: A General Equilibrium Analysis
Classification-JEL: F0
Pages:  119-125
Volume:  Volume 10
Issue:  Number 1
Year:  1989
Abstract:  Energy is critical for all human activity. Many countries import a major proportion of essential energy resources such as oil, for which the ability to substitute alternative inputs is difficult in both the short and long run. A possible response to the prospect that energy prices can fluctuate is for governments to negotiate long-term contracts with suppliers to mitigate sudden price shocks. This strategy is, however, not cost-free. It is equally rational for suppliers to negotiate high prices which protect them from the prospect of having to supply their oil at a lower price than they could anticipate in the future. A country seeking long-term protection from unstable oil prices via long-term contracts, therefore, faces higher current prices.
Handle: RePEc:aen:journl:1989v10-01-a10
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=1924
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