Estimating energy price elasticities for the non-oil manufacturing industries in Kuwait

This study dealt with the estimation of price elasticities for the non-oil manufacturing industrial energy demand for the case of Kuwait using the two-stage inter-fuel substitution approach. The estimated model has performed quite well and thus was simulated assuming a 100 per cent price shock in order to gain the short- and long-run own-and cross-price elasticities. The results suggest that a great deal of adjustment to higher prices comes from total energy demand and not from inter-fuel substitution.