World Energy Outlook 2006

The different effects of higher prices on oil demand by sector are more evident
when demand is expressed in per-capita terms, as the effect of changes in
population is stripped out (Figure 11.13). Total per-capita oil consumption fell
in 2001-2002 and levelled off in 2005, following sharp increases in oil prices
in the previous years. Most of the recent fluctuations in oil use per capita have
been explained by shifts in non-transport demand, which has been trending
downwards in a rather erratic manner since the 1980s and reached a low point
in 2002. The lagged impact of price increases since 2002 is clearly apparent. In
particular, the estimated plateauing of demand in 2005 was due to higher
prices. In contrast, per-capita oil use for transport has been rising with income
in an almost perfect linear relationship since the early 1990s, with fluctuations
in prices having only a very limited effect on demand trends. In only one year
since then has demand fallen relative to GDP: in 2001, and then only
marginally, largely because of the temporary adverse impact on personal travel
of the events of 11 September.
toe per capita
0.50
0.45
0.40
0.35
0.30
0.25
Figure 11.13: World Oil Demand and Real GDP Per Capita
0.55 1971 1980 1986 2005
Non-transport sectors
Transport sector
0.20
5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0
Note: 2005 data are estimated.
Source: IEA analysis.
GDP per capita (thousand $ in year-2005 dollars, PPP)
The share of transport – the demand for which is price-inelastic relative to
other services – in total primary oil consumption is increasing steadily in most
countries. For the world as a whole, it has risen from 35% in 1980 to 47% in
Chapter 11 - The Impact of Higher Energy Prices 291
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© OECD/IEA, 2007