IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i11p4851-d1664121.html
   My bibliography  Save this article

Motivating Green Transition: Analyzing Fuel Demands in Turkiye Amidst the Climate Crisis and Economic Impact

Author

Listed:
  • Emine Coruh

    (Department of Civil Engineering, College of Engineering and Natural Science, Gümüşhane University, Gümüşhane 29100, Türkiye)

  • Mehmet Selim Yıldız

    (Department of Agricultural Economics, College of Agriculture, Atatürk University, Erzurum 25030, Türkiye)

  • Faruk Urak

    (Department of Economics, College of Economics and Administrative Sciences, Bitlis Eren University, Bitlis 13000, Türkiye)

  • Abdulbaki Bilgic

    (Department of Agricultural Economics, College of Agriculture, Bursa Uludağ University, Bursa 16059, Türkiye)

  • Vedat Cengiz

    (Department of Economics, College of Political Sciences, Kocaeli University, Kocaeli 41001, Türkiye)

Abstract

Decarbonizing the transportation sector is critical for sustainable development, particularly in rapidly urbanizing countries like Turkiye. This study analyzes fuel demand elasticities for diesel, gasoline, and LPG across 12 NUTS-1 regions of Turkiye in 2022, using a panel random effects SUR approach. The model accounts for regional variation and fuel interactions, producing robust estimates that uncover significant spatial and temporal differences in consumption patterns. Uniquely, diesel demand displays a significantly positive price elasticity, challenging the conventional assumption of inelasticity. Gasoline demand is moderately price-sensitive, while LPG appears relatively unresponsive. Strong cross-price elasticities—especially between diesel and gasoline—point to substitution effects that can inform more adaptive policy frameworks. Seasonal fluctuations and Istanbul’s outsized impact also shape national trends. These findings underscore the need for differentiated region- and fuel-specific strategies. While higher gasoline taxes may effectively reduce demand, lowering diesel and LPG use will require complementary measures such as infrastructure upgrades, behavioral incentives, and accelerated adoption of alternative fuels. The study advocates for regionally adjusted carbon pricing, removal of implicit subsidies, and targeted support for electric and hybrid vehicles. Aligning fiscal tools with actual demand behavior can enhance both the efficiency and equity of the transition to a low-carbon transportation system.

Suggested Citation

  • Emine Coruh & Mehmet Selim Yıldız & Faruk Urak & Abdulbaki Bilgic & Vedat Cengiz, 2025. "Motivating Green Transition: Analyzing Fuel Demands in Turkiye Amidst the Climate Crisis and Economic Impact," Sustainability, MDPI, vol. 17(11), pages 1-31, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:11:p:4851-:d:1664121
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/11/4851/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/11/4851/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zia Wadud & Daniel Graham & Robert Noland, 2009. "A cointegration analysis of gasoline demand in the United States," Applied Economics, Taylor & Francis Journals, vol. 41(26), pages 3327-3336.
    2. Jerry Hausman, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    3. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    4. Hashem Pesaran, M. & Yamagata, Takashi, 2008. "Testing slope homogeneity in large panels," Journal of Econometrics, Elsevier, vol. 142(1), pages 50-93, January.
    5. Hymel, Kent M. & Small, Kenneth A., 2015. "The rebound effect for automobile travel: Asymmetric response to price changes and novel features of the 2000s," Energy Economics, Elsevier, vol. 49(C), pages 93-103.
    6. Hu, Wenhao & Ho, Mun S. & Cao, Jing, 2019. "Energy consumption of urban households in China," China Economic Review, Elsevier, vol. 58(C).
    7. Raven Molloy & Hui Shan, 2013. "The Effect of Gasoline Prices on Household Location," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1212-1221, October.
    8. Hasanov, Mübariz, 2015. "The demand for transport fuels in Turkey," Energy Economics, Elsevier, vol. 51(C), pages 125-134.
    9. Emine Coruh & Faruk Urak & Abdulbaki Bilgic & Steven T. Yen, 2022. "The role of household demographic factors in shaping transportation spending in Turkey," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 3485-3517, March.
    10. Bhuvandas, Dhanyashree & Gundimeda, Haripriya, 2020. "Welfare impacts of transport fuel price changes on Indian households: An application of LA-AIDS model," Energy Policy, Elsevier, vol. 144(C).
    11. Gillingham, Kenneth & Munk-Nielsen, Anders, 2019. "A tale of two tails: Commuting and the fuel price response in driving," Journal of Urban Economics, Elsevier, vol. 109(C), pages 27-40.
    12. Lin, C.-Y. Cynthia & Zeng, Jieyin (Jean), 2013. "The elasticity of demand for gasoline in China," Energy Policy, Elsevier, vol. 59(C), pages 189-197.
    13. 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.
    14. Gasim, Anwar A. & Agnolucci, Paolo & Ekins, Paul & De Lipsis, Vincenzo, 2023. "Modeling final energy demand and the impacts of energy price reform in Saudi Arabia," Energy Economics, Elsevier, vol. 120(C).
    15. Arze del Granado, Francisco Javier & Coady, David & Gillingham, Robert, 2012. "The Unequal Benefits of Fuel Subsidies: A Review of Evidence for Developing Countries," World Development, Elsevier, vol. 40(11), pages 2234-2248.
    16. Akbostancı, Elif & Tunç, Gül İpek & Türüt-Aşık, Serap, 2018. "Drivers of fuel based carbon dioxide emissions: The case of Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2599-2608.
    17. Andersson, Öivind & Börjesson, Pål, 2021. "The greenhouse gas emissions of an electrified vehicle combined with renewable fuels: Life cycle assessment and policy implications," Applied Energy, Elsevier, vol. 289(C).
    18. Dahl, Carol A., 2012. "Measuring global gasoline and diesel price and income elasticities," Energy Policy, Elsevier, vol. 41(C), pages 2-13.
    19. Alberini, Anna & Horvath, Marco & Vance, Colin, 2022. "Drive less, drive better, or both? Behavioral adjustments to fuel price changes in Germany," Resource and Energy Economics, Elsevier, vol. 68(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rahmi Topcu & Emine Coruh, 2025. "External Costs of Road Traffic Accidents in Türkiye: The Willingness-to-Pay Method," Sustainability, MDPI, vol. 17(21), pages 1-20, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ghoddusi, Hamed & Morovati, Mohammad & Rafizadeh, Nima, 2022. "Dynamics of fuel demand elasticity: Evidence from Iranian subsidy reforms," Energy Economics, Elsevier, vol. 110(C).
    2. Bakhat, Mohcine & Labandeira, Xavier & Labeaga, José M. & López-Otero, Xiral, 2017. "Elasticities of transport fuels at times of economic crisis: An empirical analysis for Spain," Energy Economics, Elsevier, vol. 68(S1), pages 66-80.
    3. Aladejare, Samson Adeniyi, 2022. "Natural resource rents, globalisation and environmental degradation: New insight from 5 richest African economies," Resources Policy, Elsevier, vol. 78(C).
    4. José Alberto Fuinhas & Matheus Koengkan & Nuno Carlos Leitão & Chinazaekpere Nwani & Gizem Uzuner & Fatemeh Dehdar & Stefania Relva & Drielli Peyerl, 2021. "Effect of Battery Electric Vehicles on Greenhouse Gas Emissions in 29 European Union Countries," Sustainability, MDPI, vol. 13(24), pages 1-26, December.
    5. Pang, Jindong & An, Lan & Shen, Shulin, 2023. "Gasoline prices, traffic congestion, and carbon emissions," Resource and Energy Economics, Elsevier, vol. 75(C).
    6. Binsaeed, Rima H. & Khan, Zeeshan & Dogan, Eyup & Rahim, Syed, 2025. "The role of energy efficiency, renewable resources, green innovation, and fiscal decentralization in sustainable development: Evidence from OECD countries," Utilities Policy, Elsevier, vol. 95(C).
    7. Ihsen Abid & Soumaya Hechmi & Ines Chaabouni, 2024. "Impact of Energy Intensity and CO 2 Emissions on Economic Growth in Gulf Cooperation Council Countries," Sustainability, MDPI, vol. 16(23), pages 1-20, November.
    8. Rim El Khoury & Nohade Nasrallah & Hazem Marashdeh & Osama F. Atayah & Kaliyan Mathiyazhagan, 2024. "The nexus of Green finance and renewable energy on CO2 emissions," Business Strategy and the Environment, Wiley Blackwell, vol. 33(8), pages 8911-8928, December.
    9. Mariam Camarero & Sergi Moliner & Cecilio Tamarit, 2025. "Which are the long-run determinants of US outward FDI? Evidence using large long-memory panels," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 34(2), pages 259-290, February.
    10. Murshed, Muntasir & Dao, Nhung Thi Tuyet, 2020. "Revisiting the EKC hypothesis in South Asia: The role of Export Quality Improvement," MPRA Paper 111620, University Library of Munich, Germany, revised 2020.
    11. Akusta, Emre, 2024. "The impacts of different types of globalization on energy security risk: Can globalization be a remedy for the energy security risk of OECD countries?," Energy, Elsevier, vol. 313(C).
    12. Boris OK Lokonon & Ichaou Mounirou, 2019. "Does foreign direct investment impede forest area in Sub‐Saharan Africa?," Natural Resources Forum, Blackwell Publishing, vol. 43(4), pages 230-240, November.
    13. Kadjatou Dakoure & Mahamadou Diarra & M. Idrissa Ouedraogo, 2023. "Role of the choice of exchange rate regime on real exchange rate misalignments in South Sahara African countries," International Economics and Economic Policy, Springer, vol. 20(3), pages 425-455, July.
    14. Afkhami, Mohamad & Ghoddusi, Hamed & Rafizadeh, Nima, 2021. "Google Search Explains Your Gasoline Consumption!," Energy Economics, Elsevier, vol. 99(C).
    15. Laeeq Razzak Janjua & Orhan Sanli & Mirela Panait & Mirela Cristea & Atteeq Razzak, 2024. "Impact of energy security and economic growth on poverty: sample of Sub-Saharan Africa," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(10), pages 25459-25484, October.
    16. Ahmet KARAKAŞ & Melek ACAR, 2022. "Determinants of liquidity in commercial banks: evidence from the Turkish banking sector," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 14(3), pages 236-268, December.
    17. Saliha Çınar & Aygül Anavatan & Fatih Deyneli, 2022. "Testing Effects of the Treasury single account system on the cost of borrowing in the OECD Countries," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 46(4), pages 757-770, October.
    18. Kaplan, Emin Ahmet & Erul, Rana Dayıoğlu, 2019. "The Problem of Global Turmoil in The Dilemma of Globalization-Multilateralism: Long-Term Interactions Between Democracy and Economy within The Framework of Political Regimes," MPRA Paper 98280, University Library of Munich, Germany.
    19. Arzaghi, Mohammad & Squalli, Jay, 2015. "How price inelastic is demand for gasoline in fuel-subsidizing economies?," Energy Economics, Elsevier, vol. 50(C), pages 117-124.
    20. Nuno Silva & José Alberto Fuinhas & Matheus Koengkan & Emad Kazemzadeh & Volkan Kaymaz, 2024. "Renewable energy deployment in Europe: Do politics matter?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 28751-28784, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:11:p:4851-:d:1664121. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.