Modelling Crude Oil Demand in Malaysia

Oil has been the cheap energy source that has fired the industrial society for the
last century. However, threatening signs of oil depletion has become a horror
nightmare for humankind. The implications are catastrophic for industrial societies,
and also the yearned for economic development of the less developed countries.
When we are talking about demand, the frrst thing that will come to people
mind is the price. In 2008, Malaysia petrol price rose from RM1.92 to RM2. 70 a
litre, cutting down the annual subsidy for petrol to only 30 sen per litre. The subsidy
For diesel was also cut, raising the diesel price from RM1.58 to RM2.58 per litre.
As we can see, once the production does not satisfy the demand, the oil price
will jump. This will be followed by the increase of other daily product price. Some
people even taking advantages from the increment by increasing their product price
without control. This will cause burden the citizen of Malaysia, especially people
with low income.
Because of that, there is a real need for estimating of future demand of
petroleum. This will enable the policy-makers to plan for cost effective investment
and operation of existing and new refineries so that the supply of crude oil can be
adequate enough to meet the future demand.