Abstract
This study attempts to analyse the factors that are likely to influence demand for petrol in the United Kingdom,through a model building approach based on pragmatic considerations. Petrol demand is considered as arising mainly from variations in desired car ownership, car consumption characteristics and car utilisation rates which are the outcomes of decisions taken with respect to changes in the economic environment. This assumption leads to the construction of a four-equation econometric model which is estimated on the basis of data covering the period 1955 - 1973. The model's validity is tested for the years 1974 - 1976. The estimates derived suggest that petrol price increases are unlikely to affect short-run petrol demand, which appears as both price and income inelastic. In the long-run however significant petrol price increases may result in people looking for more economical (from the point of view of petrol consumption) cars.