Transport demand for energy: a case study for Kuwait

This paper presents a model for the demand for oil products in the transport sector of Kuwait using a time-series data for the period 1975–1995. The results indicate that the demand for gasoline is inelastic with respect to price and income in the short and long run. The demand has a short-run elasticity which approaches unity when it comes to the average fuel economy of the fleet of automobiles which indicate a rapid response to changes in the automobiles technology. Furthermore, the results reveal that diesel fuel consumption is price and income inelastic in the short-run but exceed perfectly elasticity in the long-run. As for the case of aviation fuel, the demand is inelastic with respect to the price in the short run but it exceeds unit elasticity with respect to the number of flights landed in Kuwait which indicate that the activity variable is more significant in determining the demand for aviation fuel than its own price. Copyright © 1999 John Wiley & Sons, Ltd.