Unveiling the nexus between fuel consumption, vehicle registration, population and GDP of Nepal

Abstract

Vehicle numbers soar with the increase in travel demand, thus increasing petroleum consumption, one of the extensive non-renewable resources. The increased demand for travel is also linked to Gross Domestic Product (GDP). However, due to the rise in fuel standards and higher fuel efficiency vehicles, the fuel consumption per vehicle is following the decreasing patterns. Thus, this study is about the relationship between petroleum consumption, vehicle registration and GDP of Nepal using regression analysis. Data for analysis were between 1994 and 2022 for registered vehicles, petroleum consumption and GDP whereas population data were collected from 1930 to 2021. The linear regression model came to be statistically significant between variables, (a) vehicles registered and petroleum consumption (diesel and petrol sales); (b) operating vehicles and petroleum consumption; and (c) operating light vehicles and petrol consumption. Similarly, significant exponential regression models were observed between (a) GDP and operating vehicles; and (b) GDP and petroleum consumption. Additionally, the study presented a logistic population growth model and vehicle growth model as significant models to put forth predicted population and vehicles in 2030 and 2040. These models were used to estimate the possible petroleum consumption in 2030 and 2040. Alongside, a situation, where high electric vehicle penetration might be observed, was also taken to predict the possible petroleum consumption. Rising petroleum consumption can be curbed to a certain limit with proper policy interventions and research and development in electric vehicles.