Including The Refined Petroleum Product As Part Of The Strategic Petroleum Reserve

Oil has a very broad industry chain as it is the basis of the development of industry. For this reason, an unexpected oil disruption will do huge damage to the economic and social welfare of one country. West countries build up their strategic petroleum reserve (SPR) after the crisis happened in the1970s. However, the study of categories of SPR is still staying on the perspective of qualitative analysis. For this reason, this paper focuses on the issues regarding of the refined petroleum product reserve.Our country suggested reserving the refined petroleum product in2009and some issues remained, however, this paper discussed these things carefully. First of all, this paper calculates the best scale of refined petroleum product reserve which may be helpful for our government. Secondly, the perspective of there is some delay effect of crude oil response when oil crisis happen is included in the model. It will do goodness for the research afterwards. At last, this paper analyzes the impact of refined petroleum product on whole SPR so this model is a kind of improvement of models we already have now.This paper first analyze the best scale of refined petroleum product reserve is equal to the quantity of25days import oil through the two stage model. The main influence factors are the cost of the refined petroleum product reserve, the degree of dependence upon importation of petroleum, the expecting oil disruption scale. The last two factors have a positive correlation with the best scale of refined petroleum product reserve while the first factor is negative. This paper also probe into the model which include crude oil reserve and the refined petroleum product at the same times. The research shows that the best scale of whole SPR is about103days. A country needs more SPR reserve if the delay of crude oil response is longer. The best scale is very sensitive to the oil price elasticity. The refined petroleum product reserve will help to decrease the whole scale of SPR so it may decrease the total cost of SPR. However, this paper emphasize that no matter the best scale of refined petroleum product or the crude oil, it is dynamic. It will change with the change of its influence factors.