Statistical Model Proposed to Predict Petroleum Products Consumption in Egypt

Abstract

Egypt is a hydrocarbon production pioneer, as it is one of the oldest energy producers and refiner in the Middle East & North Africa region. The country is considered the largest oil producer in Africa out of the Organization of the Petroleum Exporting Countries (OPEC) and the third largest natural gas producer on the continent following Algeria and Nigeria, according to the Energy Information Administration. The country is also an active member of the Organization of Arab Petroleum Exporting Countries (OAPEC) since 1973. Egypt has significant energy resources, both in fossil fuels (oil and natural gas) and in renewable energy. Depending on fossil fuels as it is the main source of energy, the country has witnessed an increasing level of oil and natural gas consumption. Those two main energy sources (oil & natural gas) represent most of the energy consumption in Egypt, accounting for more than 95% of total energy consumption. Egypt started turning to natural gas to replace oil in the domestic market, mainly for fuelling heavy industries and electric power plants to save more crude oil for exports. So this study aims to statistically analyze the causal relationship between petroleum consumption and economic growth in Egypt within a multivariate time series framework.