OIL PRODUCTS DISTRIBUTION IN IRAN: A PLANNING APPROACH

The significance of this study is that it examines the functions of the most important element in the public sector of the economy of Iran--the Ministry of Oil. Oil is the main source of Iran's foreign earnings and the commodity most crucial to the country's economy as its prime export. Furthermore, it plays a vital role in meeting domestic energy demands. The distribution of oil products affects, on the one hand, households, small businesses, and larger industries while, on the other, it affects the allocation, in general, of other national resources. Accordingly, the effects of the Ministry of Oil's policies with regard to its production-distribution system cannot be overemphasized. The research entailed has elicited certain factors: The Ministry of Oil's present system suffers from a number of weaknesses in its production-distribution design. These deficiencies involved, among others, terminal location, number of terminals, assignment of terminals to customers, substitution of other major sources of energy for major oil products, the middle distillates problem, and an outmoded distribution method and techniques. This dissertation addresses alternatives which will eliminate faults in the present system. This system has carefully evaluated the efficiency of the distribution system in the past, and makes recommendations for optimum efficiency in the future. The major recommendations include the following: The proposed refinery in the Arak region is not an optimum option; an optimum terminal for domestic use of products in the Lavan area to supply the southeast of the country should be allocated; increasing the availability of natural gas, liquid petroleum gas, and hydroelectric power must be seriously considered. Discussed also are possible changes in energy pricing; the imbalances between production and consumption; and the nature of the improvements to be introduced into the distribution network of major petroleum products, given the present and prospective economic conditions in Iran. The approach and conclusions of this research have the potential of application to any type of industry in Iran--oil or otherwise, whether in the private or public sector--that has a similar intricate distribution-system design subject to similar variables.