Natural gas demand in Turkey

Erkan Erdoğdu ()

MPRA Paper from University Library of Munich, Germany

Abstract: On average, energy demand of Turkey is mounting by 8% annually, one of the highest rates in the world. Among primary energy sources, natural gas is the fastest growing one in Turkey. Gas consumption started at 0.5 bcm (billion cubic meters) in 1987 and reached approximately 35 bcm in 2007. Turkish natural gas usage is projected to further increase remarkably in coming years. The present paper focuses the characteristics of this demand and estimates short and long-run price and income elasticities of sectoral natural gas demand in Turkey. The future growth in this demand is also forecasted using an ARIMA modelling and the results are compared with official projections. The paper reveals that natural gas demand elasticities are quite low, meaning that consumers do not respond possible abusive price increases by decreasing their demand or substituting natural gas with other energy sources. Since consumers are prone to monopoly abuse by incumbent, there is a need for market regulation in Turkish natural gas market. Based on forecasts obtained, it is clear that the current official projections do not over/under-estimate natural gas demand although past official projections highly overestimated it.

Keywords: Turkish natural gas demand; Elasticity; ARIMA modelling (search for similar items in EconPapers)
JEL-codes: O13 Q4 Q47 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-ara, nep-cwa and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published in Applied Energy 1.87(2010): pp. 211-219

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Journal Article: Natural gas demand in Turkey (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19091

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