Fuel consumption in road transport: A comparative study of China and OECD countries

Energy conservation and emissions reduction have been the focus of the road transport sector due to its energy-intensive and air pollution-intensive nature. It also embodies the imprints of human technological progress. This paper compares the energy consumption of the road transport sector in China and OECD countries. We used time series and panel data, co-integration analysis, error correction model and dynamic model to study the impacts of the major influencing factors such as income, income structure, urbanization, price, and technological advancement on gasoline and diesel consumption in road transport. Overall, China's fuel consumption is influenced mainly by investment, government expenditure and demographic changes such as urbanization, while the fuel consumption of OECD countries is mainly driven by household final consumption expenditure. In the short run and from a dynamic perspective, China's fuel consumption is less influenced by its historical consumption than current influencing factors, while that of OECD countries is more affected by historical fuel consumption. Based on the analysis and findings of this study, some policy implications are proposed.