Oil for Pakistan: What are the main factors affecting the oil import?

Muhammad Yousaf Raza and Boqiang Lin ()

Energy, 2021, vol. 237, issue C

Abstract: Oil is the second largest primary source of energy supply in Pakistan, which is linked to numerous sectors. The existing study aims to calculate the crude oil import demand in Pakistan as a function of real income and the real price of crude oil from 1986 to 2018. We carried out the autoregressive distributive lag method to measure the robustness of price and income elasticities and forecasted crude oil import dependency analysis based on a fitting line from 1986 to 2035. The empirical outcomes of the study are first, the price and income elasticities are consistent with the theoretical prospects, which confirm that income elasticity is significant, while price elasticity is insignificant. Second, the positive growth of income elasticity is 0.21 proposes that imported crude oil in Pakistan is rising income level due to sectorial oil consumption. Third, the two-dimensional imported crude oil and forecasted oil dependency during 2019–2035 estimated that Pakistan's imported crude oil dependency would increase annually by 0.07 %, and 76 % dependency would reach until 2035. Finally, being a necessary product, the Government should support macroeconomic regulation and strengthen the mechanism of oil security and price regulations. Furthermore, the policy suggestions provided below will help Pakistan's policymakers respond appropriately.

Keywords: Crude oil import; Price elasticity; Income elasticity; Oil dependency; Real GDP; Pakistan (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544221017837
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:237:y:2021:i:c:s0360544221017837

DOI: 10.1016/j.energy.2021.121535

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().