Welfare analysis of automotive energy pricing : case of Indonesia | |
| Author | Achmad P. Nugraha |
| Call Number | AIT Thesis no. ET-98-9 |
| Subject(s) | Power resources--Prices Welfare economics |
| Note | A thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering, School of Environment Resources and Development |
| Publisher | Asian Institute of Technology |
| Abstract | The welfare analysis of automotive energy in Indonesia has an important significance as measurement of economic efficiency of pricing. This matter requires a lot of relatively relevant information, such as price and income per capita since the measurement requires estimation of automotive energy demand as well as automotive energy supply. In order to establish a quite good model for both automotive energy demand and supply which reflects accurately changes in the model corresponding to economic and societal factors, we should exercise this task by applying an econometric approach. In detailed, a lagged logaritmic natural-linear regression analysis was used for the case of Indonesia. Other different models are analysed with the help of an econometric software known as SPSS. Study results figure out the unexpected inelasticity of price and income for almost all types of automotive energy demand based on available data. However, the exception should be addessed to premium gasoline which have elastic pricing characteristic and CNG which have elastic income characteristic. Further study for supply side results the unexpected inelasticity of opportunity cost for all types of automotive energy demand based on available data. Hence, it entails a comment on pricing system of automotive energy almost controlled absolutely by the Government followed the country states of law for the maximum benefit of people. Based on those law, the state enterprises would be in charge for oil and gas activities. However, the welfare analysis based on the above automotive energy demand and supply indicates that automotive energy prices being set up economically efficient unless for the last two years. Therefore, it would create reason to improve the price system with more adaptive pricing policy in the future. One of consideration is changing behavior of oil and gas international industry. Fmihermore, policies concerning energy pricing and/or economic growth as well as social welfare implications should be set up with consideration upon energy pricing objectives. Study results indicates demand reduction only around 10% for relatively high increased of automotive energy price under normal economic condition should be achieved. In addition, there are some econometric petroleum products demand studies on some Asian countries including Indonesia. However, these works are using an approach average retail prices of petroleum products, therefore the study will only give some view without the same references to this study because of its particular features and situations. In this study, the automotive energy demand as well as automotive energy supply analysis in Indonesia has been conducted with the following OLS regression approach by the time-series data to estimate welfare analysis. |
| Year | 1998 |
| Type | Thesis |
| School | School of Environment, Resources, and Development (SERD) |
| Department | Department of Energy and Climate Change (Former title: Department of Energy, Environment, and Climate Change (DEECC)) |
| Academic Program/FoS | Energy Technology (ET) |
| Chairperson(s) | Pacudan, Romeo B.; |
| Examination Committee(s) | Lefevre, T. ;Savin, Daniel. V. ; |
| Scholarship Donor(s) | European Community ; |
| Degree | Thesis (M.Eng.) - Asian Institute of Technology, 1998 |