Economic analysis and investment in fuel industry considering risk management by analytical hierarchy process

Abstract

Natural Gas production and distribution network plans are one of the most common ways to increase energy consumption efficiency. Due to the uncertainty of the economic parameters, the economic justification of this system is very difficult. In this research, the economic risk of investing in urban gas distribution systems has been done with the analytical hierarchy process (AHP). With the development and condensation of urban gas supply networks, accidents caused by gas leaks and other external factors have also increased. Therefore, in recent years, the issue of safety and risk analysis of urban gas networks has received special attention from responsible companies and other urban and safety experts. Gas distribution lines often pass in the vicinity of crowded areas and buildings, so any accident for these lines will lead to a lot of human and financial losses. In the present study, in order to improve the gas supply situation and reduce the risk of failure in Indonesia, urban gas pipelines have been studied to reduce the costs. In this paper, multi-criteria decision making method analysis is used to identify and evaluate the hazards of urban gas pipelines and the risk of occurrence of each hazard is calculated. There was a meaningful relationship based on economic-financial theories between economic factors and investment risk in the gas industry, which emphasizes the greater and more significant effect of exchange rate, failures and inflation rate variables in comparison with other research variables in the matter of controlling investment risk in the gas industry. The effects of changes in energy prices and the economic environment in explaining the behavior of investment risk in this industry have placed the next level of importance. The results showed that with the increase in energy prices, the economics of gas production and distribution risk management plans have improved and the regular trend of energy price increases can guarantee the profitability of fuel consumption optimization plans.