The demand for transport fuels in Turkey

Mübariz Hasanov

Energy Economics, 2015, vol. 51, issue C, 125-134

Abstract: In this paper, we estimate the demand for transport fuels in Turkey. Specifically, using four different models, namely a partial adjustment model, a distributed lag model, an autoregressive distributed lag model, and an error correction model, we estimate gasoline and diesel demand functions with quarterly data covering the period 2003:Q1–2014:Q3. We find a stable long-run relationship only for diesel demand, income and price. Our results imply that gasoline demand does not respond to income and price in the long run, reflecting a shift from gasoline towards diesel induced by differential tax policies. Furthermore, we find that transport fuel demand is price inelastic, making tax on fuel a perfect tool for raising budget revenues. In addition, our results suggest that fuel demand responds to negative and positive price changes symmetrically.

Keywords: Gasoline demand; Diesel demand; Elasticity; Estimation (search for similar items in EconPapers)
JEL-codes: C13 C22 Q32 Q35 Q41 Q48 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:51:y:2015:i:c:p:125-134

DOI: 10.1016/j.eneco.2015.05.023

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