Social and Behavioral Sciences Commons^™

Domestic Demand For Petroleum In Opec Countries, Ujjayant N. Chakravorty, Fereidun Fesharaki, Shuoying Zhou

Ujjayant Chakravorty

The literature on OPEC energy policy has focused primarily on its production and export potential. The rapidly increasing domestic demand for petroleum products in OPEC countries has often been ignored. This study estimates domestic demand for petroleum products by the major OPEC economies and forecasts consumption trends under alternative assumptions regarding economic growth and price deregulation. It concludes that product demand is generally price and income inelastic and thus domestic consumption in OPEC will continue to grow rapidly, even if domestic prices are raised closer to world levels in the near future.