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Oil Dependence: Is Transport Running out of Affordable Fuel?

  • OECD
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    The transport sector’s demand for oil is less price sensitive than any other part of the economy. This is partly because demand for transport services is relatively insensitive to price and partly because substitutes for oil in road transport are currently far from cost-effective. Evidence from the USA suggests that as incomes rise, transport sector oil demand becomes even less price sensitive. This implies that oil consumption is set to become increasingly concentrated in the transport sector. It also implies that relatively limited fluctuations in demand can have increasingly significant effects on oil prices.

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    File URL: http://dx.doi.org/10.1787/235517712500
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    Paper provided by OECD Publishing in its series OECD/ITF Joint Transport Research Centre Discussion Papers with number 2008/5.

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    Date of creation: Feb 2008
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    Handle: RePEc:oec:itfaaa:2008/5-en
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