Gasoline, Diesel Fuel and Jet Fuel Demand in South Africa

The paper investigates the price and income elasticity of gasoline (petrol), diesel and jet fuel demand in South Africa using autoregressive distributed lag (ARDL) models. We compare elasticity estimates for 1982Q1-2010Q4 with estimates for 1998Q1-2010Q4. Price and income elasticity estimates for gasoline remain unchanged compared to previous estimates and robust across smaller sub-periods. Similar to recent findings for other developing countries, income is the dominant driver of South African diesel demand even when controlling for the increased number of diesel vehicles. Similarly, income dominates jet fuel demand, a finding that is robust to controls for international tourist departures and is consistent with international findings