This paper uses panel data analysis to examine those provisional gasoline and diesel demand from 1999 to 2006 in China. It is found that per capita GDP and per capita car have significant impacts on the gasoline consumption, and those variables of the gasoline price and diesel price and the per capita GDP have significant impacts on the diesel consumption. Since per capita GDP is still going up even in current world recession period, we expect Chinese gasoline and diesel consumption will still gain up. While the finding of more price sensitive characteristics for the diesel consumption indicates that it is much easier to restraint the diesel consumption as price goes up.
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