Economic analysis and investment in fuel industry considering risk management by analytical hierarchy process
Economic Annals-XXI: Volume 197, Issue (5-6), Pages: 10-16
Citation information:
Zainal, A. G., Djimad, H., Rudy, Suciska, W., & Djausal, G. P. (2022). Economic analysis and investment in fuel industry considering risk management by analytical hierarchy process. Economic Annals-XXI, 197(5-6), 10-16. doi: https://doi.org/10.21003/ea.V197-02
Anna Gustina Zainal
MA (Economics),
Communication Department,
University of Lampung
Lampung, 35141, Indonesia (Correspond author)
anna.gustina@fisip.unila.ac.id
ORCID ID: https://orcid.org/0000-0003-2619-4897
Habibullah Djimad
MA (Economics),
Management Department,
University of Lampung
Lampung, 35141, Indonesia
habibullah.djimad@fe.unila.ac.id
ORCID ID: https://orcid.org/0000-0003-2355-1342
Rudy
MA (Economics),
Faculty of Law,
University of Lampung
Lampung, 35141, Indonesia
rudy.rudy@fh.Unla.ac.id
ORCID ID: https://orcid.org/0000-0001-8041-3224
Wulan Suciska
MA (Economics),
Communication Department,
University of Lampung
Lampung, 35141, Indonesia
wulan.suciska@fisip.unila.ac.id
ORCID ID: https://orcid.org/0000-0001-6711-7682
Gita Paramita Djausal
MA (Economics),
Business administration,
University of Lampung
Lampung, 35141, Indonesia
gita.paramita@fisip.unila.ac.id
ORCID ID: https://orcid.org/0000-0003-1215-7366
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.
Keywords: Economic Analysis; Fuel Economy; Risks; Gas Pipelines; Multi-Criteria Decision Making; Analytical Hierarchy Process
JEL Classіfіcatіon: M10; M11; Q13; Q17
Acknowledgements and Funding: The authors received no direct funding for this research.
Contribution: The authors contributed equally to this work.
Data Availability Statement: All data will be available upon request.
DOI: https://doi.org/10.21003/ea.V197-02
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Received 16.12.2021
Received in revised form 18.01.2022
Accepted 28.01.2022
Available online 22.06.2022