Statistical assessment and analyses of the determinants of transportation sector gasoline demand in Jordan

Abstract

The main objectives of this study are to analyze past gasoline consumption in Jordan’s transportation sector and to identify main factors affecting its future demand. The sector is responsible for 39% of the total final energy consumption in Jordan, and is nearly totally dependent on oil consumption. The structure of this sector is analyzed with focus on passenger cars which represent 65% of total vehicles, and are responsible for nearly all of the national gasoline fuel demand. To achieve these objectives, the study develops a multi linear regression model using different independent variables based on 22-year historical data between years 1988 and 2009 refined from scattered data sources. The final model includes only the number of registered vehicles, income level, and gasoline price variables. A number of policy gaps are identified as contributors to the low efficiency composition of the fleet in terms of engine size, composition, availability of public transport, fuel prices, vehicle age, and type of ignition. To illustrate the importance of integrating energy policies within national energy plans, the impact of ending subsidies of gasoline was investigated and found to be significant. Without such policies, gasoline consumptions are predicted to rise by 1.81%/year. However, if such policies are implemented, over the same period, gasoline consumptions are forecasted to ascend at a lower rate of 0.53%/year.