On Optimal Allocation of Oil under Uncertainty in Case of Supply Shortage in China

Energy security has become a hot issue since the oil crisis in 1970s, much attention has been paid to the problem how to mitigate the effects of a disruption or shortage to the oil supply. In this paper, we try to establish an optimal plan that allocates the limited oil optimally to the selected sectors in case of oil shortage by employing the interval-parameter fuzzy two-stage stochastic programming model combining with the dynamic computable general equilibrium model. We find that the agricultural sector seems to be the most important unit within the entire country, the oil therefore must be first delivered to this sector in case of disruption; additionally, it's no necessary for managers in the industrial and constructional sectors to curtail their expansion plans unless a serious oil supply disruption occurs, oil demands are able to be satisfied in most targeted scenarios. In particular, the government should make great effort to improve public transport infrastructure and encourage use of public transport, they can also engage in sponsoring research and development work to increase the efficiency of transportation vehicle and facilities and promoting alternative fuels such as alcohol fuel, reducing vulnerability to oil supply shortfall and alleviating the impact of oil disruption.