This study has the following two purposes; One is to build the optimal capacity expansion plan for refineries that would enable to meet the entire domestic demand for all petroleum products. The other is to analyze the crude oil combination which is best suited for the domestic demand pattern of petroleum products and low sulfur fuel oils.
Linear Programming Model has been used to perform the economic evaluation of each crude oil and Dynamic Programming Model and plade Programming have been used to develop the investment plan for refineries.
The result by L/P Model shows the following;
1) in 1981 when the demand for the 1.6% sulfur Bunker-C is low, it seems to be economical to fulfil the demand for the low sulfur fuel oils by importing the Murban Oil and to fulfil the demand for other petroleum products by importing the Arabian Heavy, Medium, Iranian Heavy Oil etc.
2) in 1986 when the demand for the 1.0% sulfur Bunker-C is low and the demand for the 1.6% sulfur Bunker-C is high, it seems to be economical to fulfil the demand for the 1.0% sulfur Bunker-C by the Minas Oil and to fulfil the demand for the 1.6% sulfur Bunker-C by the Murban Oil as suggested for 1981. It also seems economical to meet the demand for the other petroleum products by importing oils as suggested for 1981.
As the optimal capacity expansion plan, a refinery of large capacity should be built to benefit from the internal economics of scale when the demand is at the level expected. However, it seems proper to construct the additional refieneries to meet the excess demand when the demand is higher than the trends indicate.
