Estimation of Energy Demand Function in Iran Road Transportation Sector,1978-2013

Economic growth is a fundamental basis for macroeconomic policies of any country and energy is one of the essential and main factors of economic growth in any society. In Iran، transportation sector has the second- highest petroleum product consumers among other sectors. The land taransport sector (road and rail) has about 92% of total energy consumption، the main part of this consumtion is related to road transport subsection. This paper reviews factors effecting Iran’s road transport sector energy demand and then by OLS method estimate energy demand in this sector for the period of1978-2013. Results show that inventory of vehicles has a significant positive effect on demand energy. The price elasticity of gasoline and natural gas is significantly negetive. The price elasticity of gas oil has not a significant effect on transportation sector energy demand during the period of study. The income elasticity of energy demand is positive and significant.