lunes, marzo 07, 2011

Cuba’s petroleum demand and price elasticity/ Jorge Piñón

By Jorge Piñón
Demand is generally defined as the relationship between the price of a good or service and the amount or quantity the consumer is willing and able to purchase of that good or service. Simply stated, it is the relationship between price and quantity. The question in a centralized economic system is the responsiveness to price by consumers — price elasticity — due to the lack of substitute goods and or services. 

Cuba’s petroleum demand is estimated to be around 147,000 barrels per day. Sixty percent of that demand is industrial fuel oil and Cuban crude oil blend, used mostly as fuel in the electric power sector and lesser amounts in cement, mining, steel and other state owned industries. Transportation fuels such as diesel, jet fuel and motor gasoline account for 26 percent of total petroleum demand.

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