Analysis of Sectoral Energy Demand in Pakistan

Abstract

Purpose

This research aims to estimate the energy demand for different sectors, including commercial, industrial, residential, transportation, and agriculture. For this purpose, various factors affecting the demand for energy in each sector have been analyzed.

Methodology

The adopted methodology is box Jenkins a systematic approach of identification, estimation, diagnostic checks, and forecasting of the model. This model is appropriate for time series data of medium to long-term length.

Findings

The data analysis outcomes specified that Pakistan's energy demand mainly depends on five fuel types. Within each sector, the consumption of fuel varies. Results show that 86% of energy consumption share is held by transport oil, industrial gas, industrial coal, residential gas, and residential electricity.

Conclusion

The major issue in the energy sector is the demand-supply gap primarily caused by the gas and electricity deficit. Conclusively, sectoral demand increases in each sector where commercial, residential, and industrial energy demand has higher growth. Moreover, the price effect is negative for all variables except coal, making it a Giffen good