Import demand of crude oil and economic growth: Evidence from India
AbstractThis study establishes a long-run equilibrium relationship among quantity of crude oil import, income and price of the imported crude in India for the time span 1970-1971 to 2005-2006 using autoregressive distributed lag (ARDL) bounds testing approach of cointegration. Empirical results show that the long-term income elasticity of imported crude in India is 1.97 and there exists a unidirectional long-run causality running from economic growth to crude oil import. So reduction of crude oil import will not affect the future economic growth in India in the long-run. India should take various energy efficiency and demand side management measures in transport sector along with other measures like expanding and strengthening indigenous resource-base, substituting imported fuels by domestic fuels and de-controlling the price of petroleum products to reduce its import dependence.
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Bibliographic InfoArticle provided by Elsevier in its journal Energy Policy.
Volume (Year): 37 (2009)
Issue (Month): 2 (February)
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Web page: http://www.elsevier.com/locate/enpol
Crude oil import India ARDL;
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