Comparative Analysis of Price Determination in Gas Sale Contracts to End Consumers

Abstract

International gas sale contracts, as one of the key instruments in energy trade, face significant challenges—particularly in the area of price (consideration) determination. Characteristics such as long-term duration, dependency on global markets, and sharp fluctuations in energy prices have led to the adoption of dynamic and flexible pricing mechanisms in these contracts. However, the absence of clear and harmonized legal frameworks—especially within the Iranian legal system—has resulted in contractual conflicts and a reduction in economic efficiency.
This study aims to conduct a comparative analysis of pricing mechanisms in international gas sale contracts, drawing on international legal and economic sources, arbitral practices, and real contract samples, in order to propose legal improvements for Iran in this field.
The findings indicate that price determination methods may include the use of energy market indices, adjustable pricing formulas, futures contracts, or referral to independent experts. Additionally, mechanisms such as periodic price adjustments, renegotiation clauses, and price review formulas are considered effective tools for mitigating economic risks.Nonetheless, Iran’s legal system faces limitations in fully implementing these mechanisms due to jurisprudential constraints and the lack of explicit legal provisions. This study underscores the need for legal reforms in the field of energy contracts, including the formal acceptance of flexible pricing mechanisms, development of regional pricing benchmarks, and incorporation of protective clauses in long-term agreements. Implementing these reforms could pave the way for enhancing Iran’s position in the international gas market.