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Petroleum s Price Transmission and Imported Demand for Crude Oil in Thailand

Author

Listed:
  • Papusson Chaiwat

    (King Mongkut s University of Technology Thonburi, Thailand)

  • Nantarat Tangvitoontham

    (Srinakharinwirot University, Thailand)

Abstract

The study of the petroleum price structures in Thailand reveals that diesel is the important fuel because it influences inflation and productions costs. Government wants to keep diesel s price stability; meanwhile, it is less control in gasohol and petrol prices. These prices are normally higher than diesel s price in order to support the renewable energy and reduce the consumption behaviors. Real price elasticity of imported crude oil in short run is insignificant but in long run is about 0.0660 statistically significant. While, real income elasticity is about 0.4841 in short-run and increase to 0.9969 in long run. The price transmissions from crude oil to petroleum products demonstrate the inequality distribution with symmetry adjustments. Additionally, the adjustment to the long- run equilibrium of petrol price is slower than diesel price. Therefore, the efficiency energy policies should be in consideration to decrease the country's energy consumption in the future.

Suggested Citation

  • Papusson Chaiwat & Nantarat Tangvitoontham, 2014. "Petroleum s Price Transmission and Imported Demand for Crude Oil in Thailand," International Journal of Energy Economics and Policy, Econjournals, vol. 4(3), pages 476-483.
    • Handle: RePEc:eco:journ2:2014-03-17
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    Cited by:

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    More about this item

    Keywords

    price transmission; elasticity of crude oil demand;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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