Fuel Consumption in Ukraine: Evidence from Vector Error Correction Model

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Abstract

This paper aims to investigate the problems of energy market in Ukrainian economy. The empirical research of various energy sources in Ukraine showed the existence of significant relationships between coal, gas, diesel fuel, gasoline and oil consumption. We estimated the vector error correction model that combined evaluation of long-term interrelations between different fuels indexes and the dynamic description of their short-term behaviour. The modelling showed that in the long-run there were two equilibrium relationships that determined the dynamics of fuel consumption in Ukraine. We estimated the adjustment speeds and described the correlation between short-run changes in fuel usage and deviations from long-run equilibrium. The gas consumption was the most valuable kind of energy that had a great impact on functioning of Ukrainian energy market and the whole economy. The diversification of energy consumption types can give an opportunity to improve the economic situation.

Keywords: energy market, fuel consumption, vector autoregressive model.

JEL Classifications: O13, С 32.

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Author Biographies

Marianna Oliskevych, Ivan Franko National University of Lviv

Professor at Department of Mathematical Economics and Econometrics,Ivan Franko National University of Lviv, Ukraine

Galyna Beregova, Lviv Institute of Banking University

Associate Professor at Department of Economics and Information Technologies,Lviv Institute of Banking University, Lviv, Ukraine

Viktor Tokarchuk, National University of "Kyiv-Mohyla Academy"

Associate Professor at Department of Finance,National University of "Kyiv-Mohyla Academy", Kyiv, Ukraine

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Published

2018-09-05

How to Cite

Oliskevych, M., Beregova, G., & Tokarchuk, V. (2018). Fuel Consumption in Ukraine: Evidence from Vector Error Correction Model. International Journal of Energy Economics and Policy, 8(5), 58–63. Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/6825

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