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Modelling demand for crude oil products in Spain

Author

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  • Pedregal, D.J.
  • Dejuán, O.
  • Gómez, N.
  • Tobarra, M.A.

Abstract

This paper develops an econometric model for the five most important crude oil products demand in Spain. The aim is the estimation of a range of elasticities of such demands that would serve as the basis for an applied general equilibrium model used for forecasting energy demand in a broader framework. The main distinctive features of the system with respect to previous literature are (i) it takes advantage of monthly information coming from very different information sources and (ii) multivariate unobserved components (UC) models are implemented allowing for a separate analysis of long- and short-run relations. UC models decompose time series into a number of unobserved though economic meaningful components mainly trend, seasonal and irregular. A module is added to such structure to take into account the influence of exogenous variables necessary to compute price, cross and income elasticities. Since all models implemented are multivariate in nature, the demand components are allowed to interact among them through the system noises (similar to a seemingly unrelated equations model). The results show unambiguously that the main factor driving demand is real income with prices having little impact on energy consumption.

Suggested Citation

  • Pedregal, D.J. & Dejuán, O. & Gómez, N. & Tobarra, M.A., 2009. "Modelling demand for crude oil products in Spain," Energy Policy, Elsevier, vol. 37(11), pages 4417-4427, November.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:11:p:4417-4427
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    4. Tehreem Fatima & Enjun Xia & Muhammad Ahad, 2019. "Oil demand forecasting for China: a fresh evidence from structural time series analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(3), pages 1205-1224, June.
    5. Mensah, Justice Tei & Marbuah, George & Amoah, Anthony, 2016. "Energy demand in Ghana: A disaggregated analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 924-935.
    6. Barla, Philippe & Gilbert-Gonthier, Mathieu & Kuelah, Jean-René Tagne, 2014. "The demand for road diesel in Canada," Energy Economics, Elsevier, vol. 43(C), pages 316-322.
    7. Rajesh Sharma & Pradeep Kautish & D. Suresh Kumar, 2021. "Assessing Dynamism of Crude Oil Demand in Middle-Income Countries of South Asia: A Panel Data Investigation," Global Business Review, International Management Institute, vol. 22(1), pages 169-183, February.
    8. Suganthi, L. & Samuel, Anand A., 2012. "Energy models for demand forecasting—A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1223-1240.
    9. Marbuah, George, 2014. "Understanding crude oil import demand behaviour in Ghana," MPRA Paper 60436, University Library of Munich, Germany.
    10. Yusof, Ahmad & Raman, Maznah & Nopiah, Zulkifli, 2013. "Modeling of the Malaysian Crude Oil System," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 47(1), pages 125-130.
    11. Yousaf Raza, Muhammad & Lin, Boqiang, 2021. "Oil for Pakistan: What are the main factors affecting the oil import?," Energy, Elsevier, vol. 237(C).
    12. Kuckshinrichs, Wilhelm & Kronenberg, Tobias & Hansen, Patrick, 2010. "The social return on investment in the energy efficiency of buildings in Germany," Energy Policy, Elsevier, vol. 38(8), pages 4317-4329, August.
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