The demand for road transport diesel fuel in the UK: Empirical evidence from static and dynamic cointegration techniques

• Diesel demand elasticities for the UK road transport sector are estimated.
• Short-run (long-run) price elasticity range from −0.11 to −0.16 (−0.21 to −0.30).
• Short-run (long-run) income elasticity range from 0.71 to 0.88 (1.50–1.58).
• Income elasticities are higher than previous UK estimates; long-run price elasticities are lower.

This paper estimates demand elasticities for diesel fuel in the UK using static error correction and dynamic ADL time series cointegration models. While there are studies focusing on elasticities in the road transport sector, most have either looked at petrol demand or have used road transport fuel demand. Our findings indicate that the income elasticities for diesel fuel, both in the short- and the long-run are significantly higher, and the long run price elasticity is relatively lower as compared to those reported in studies using fuel or petrol demand.