Seeking Otimal Transport of Gasoline from Refineries and Ports of Entry Into Major Oil Comany Depots through Use of the Network Flow Model

This paper uses a network flow model to estimate optimal mix of different modes of transport of gasoline from refineries and ports to main stores of NIORDC(National Iranian oil Refining & Distribution comany), taking into account limitations including oil pipeline capacity, available road transport and reserves capacity. The study attempts to define how much gasoline should be transferred from which refinery or port, using which transportation system to each demand centre in order to minimize total transportation costs. The model is first applied to assess the total cost of transporting all the gasoline that can be transported by using the existing pipeline network, assuming that no possibiity exists for transportation by roads. At the next stage after subtracting the amount that can be transported by pipeline the cost of transporting the balance load by trucks is calculated. The results indicate that while pipelines transport the largest share of oil products the total cost of pipeline transport is substantially less than the cost incurred in transporting a much smaller quantity of oil products by tankers. The model shows that extending the pipeline network will increase the efficiency of oil product movement within the country and reduce the total associated cost for transport of oil products, indicating that the current mixture of modes of transporting oil products is not optimal. Finally sensitivity analysis is used to assess the extent to which results change under assumption of different shadow prices and other variables of the model.