Abstract
Indonesia regulates the pipeline gas selling price in oil and gas downstream business activities by issuing the Minister of Energy and Mineral Resources Regulation Number 58 of 2017. It has formulated the gas price by calculating the trading companies’ internal rate of return and margin but has not yet considered the purchasing power of their consumers and the gas price zone determination for when the gas price will be implemented. The study aims to optimize the gas price for industrial sector in the existing sales areas in 10 cities in East Java. The optimization is conducted by considering the pricing zones, producer net backs, and consumer social welfare on the gas price calculation. The optimal gas price is calculated using multi-objective optimization method to obtain the optimum point between the net back and social welfare functions. The study found that the gas pool is an optimal pricing zone due to have minimum effect for consumers and easy implementation for trading gas companies and government. The gas pool price can cover several cities that have different levels of market maturity. The optimal gas price in East Java gas pool is around 10.36 to 13.08 USD/MMBTU that the formulation of gas prices regulation is on this range.
| Original language | English |
|---|---|
| Pages (from-to) | 3264-3271 |
| Number of pages | 8 |
| Journal | International Journal of Advanced Science and Technology |
| Volume | 29 |
| Issue number | 7 Special Issue |
| Publication status | Published - 14 Apr 2020 |
Keywords
- Distribution pipeline
- Energy economics
- Energy policy
- Gas price
- Net back
- Social welfare
