The potentiality that the current government strategic petroleum reserves (GSPRs) can be improved by the pre-allocation of GSPR drawing rights has been neglected. This paper proposes to pre-allocate the GSPR drawing rights, and proves that by doing this the efficiency of GSPR and the society’s incentive to finance GSPR can be improved. Particularly, the example demonstrates that the incentive improvement can be very significant. Since it takes huge expenditure on GSPR and it is very important to gain support from the consumers by improving GSPR, the proposal is quite worth considering.
Z. M. Liu, L. W. Zhu and J. M. Wang, “Optimization of China’s Strategic Petroleum Reserve Policy: A Markovian Decision Approach,” Computers & Industrial Engineering, Vol. 63, No. 3, 2012, pp. 626-633.
D. Holtz-Eakin and M. E. Lovely, “Scale Economies, Returns to Variety, and the Productivity of Public Infrastructure,” Regional Science and Urban Economics, Vol. 26, No. 2, 1996, pp. 105-123.
J. C. Wei, L. Zhou and X. Zhou, “Analysis of the Evolution Mechanism of Mass Panic Buying under the Public Crisis. Case Study on Salt Panic Buying in China during the Japan Nuclear Crisis,” Journal of Management Case Studies, Vol. 4, No. 6, 2011, pp. 478-486.