A disaggregated analysis of energy demand in Cameroon: Determinants, elasticities, and policy implications

Abstract

This study offers a comprehensive disaggregated analysis of energy demand in Cameroon, employing Auto-Regressive Distributed Lag (ARDL) and Partial Adjustment Model (PAM) methodologies to explore both short- and long-term determinants. By examining a range of energy sources—including electricity, fuel oil, biomass, kerosene, LPG, diesel, and petrol—this research provides a nuanced understanding of the factors influencing energy consumption. Key determinants identified include energy prices, income levels, urbanization, and economic structure, with varying impacts across different energy types. The study reveals significant substitution effects among fuels, particularly between petrol, diesel, and kerosene with LPG. Policy implications include the need for targeted energy subsidies, particularly for LPG, to better align with household consumption needs and mitigate unintended benefits to non-residential users. Recommendations also emphasize enhancing energy efficiency, investing in infrastructure, and promoting sustainable energy practices. This research not only contributes to the literature on energy demand in emerging economies but also provides actionable insights for policymakers aiming to address energy challenges in Cameroon and similar contexts.