World energy markets and the developing countries

Primary energy consumption in the developing countries has been increasing rapidly in the last ten years, giving rise to the prospect that these countries will play an even greater role in world energy markets. This paper describes the adjustments to higher petroleum prices that have taken place in the developing countries and looks at their likely future role. For the purpose of exposition, the developing countries are divided into oil-exporting and oil-importing groups. Analysis is conducted mostly at the aggregate level but fuel-specific and sectoral trends are also identified. The author notes that the experience of the last ten years suggests that the dramatic increases in international petroleum prices had a relatively minor impact on the developing countries′ total energy consumption. There was, however, a significant degree of substitution for other fuels for petroleum in the oil-importing developing countries. The prognostications for the future presented in this paper are based on the assumption that adjustments to price changes take more time in the developing countries. A reasonable degree of adjustment can be expected for the years ahead.