Demand for Energy and the Revenue Impact of Changes in Energy Prices

The demand for energy is expected to rise sharply as a country develops. In 1971, the share of developing countries in the world energy consumption was only 15 percent, it increased to 27 percent in 1991, and it is expected to rise to 40 percent by the year 2010 (see Schneider (1994)). This rise in energy consumption is linked with industrialization and urbanization in these countries. Energy Intensity is, also, expected to rise initially with industrialization, then decline and ultimately settle down at a higher energy intensity ratio.