Abstract
This study investigated the efficiency of the oil refining industry using the two-stage method of Markowitz portfolio optimization theory and panel data analysis of about 30 OECD countries from 2005 to 2016, which is a new methodology for measuring the efficiency of the oil industry. The oil refining industry's efficiency is derived from the prices of petroleum products (Naphtha, Gasoline, Kerosene, Diesel, and Fuel Oil) using the portfolio theory. The panel data was constructed using the following dependent variables, the crude oil production efficiency, energy consumption, renewable energy consumption, and R&D investment. Using the panel data analysis, empirical analyzes are conducted on how the efficiency of the oil refining industry is affected by explanatory variables. The results show that crude oil production and energy use in OECD countries have a negative effect on the efficiency of the oil refining industry, and consumption of renewable energy and R&D investment have a positive effect. Contrary to conventional perception, the petroleum industry can coexist with the renewable energy industry for sustainable development.
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