 Price and income elasticities of oil demand in Mauritius: An empirical analysis using cointegration methodPravesh Raghoo and Dinesh Surroop Energy Policy, 2020, vol. 140, issue C Abstract: There are no studies that quantify the effects of price and income on the demand of fuel oil, gasoline and diesel oil in Mauritius. In line with increasing retail prices for these commodities, there is no estimation of the effect that increasing price, income and other variables like electricity and vehicle stock have on demand of petroleum products which affects effective policymaking in this area. This study uses an ARDL–ECM model to determine consumer response on petroleum demand when price and income in Mauritius changes. The study determines the income and price elasticities of demand which is a needed parameter in transportation and taxation policies. It was found that gasoline is price and income inelastic in the short–run, diesel oil is income inelastic in the long–run and fuel oil is inelastic in the short–run but becomes elastic in the long–run, other variables being not significant. The effect of rising electricity consumption on fuel oil demand was to a ratio of 1: 1.1 on average. Vehicle stock is estimated to cause unprecedented increase in gasoline demand by nearly 3.1% on average. Results are essential for transportation and energy taxation policymaking. Keywords: Mauritius; SIDS; Elasticity; ARDL–ECM (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:140:y:2020:i:c:s0301421520301543 DOI: 10.1016/j.enpol.2020.111400 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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