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DIW Economic Bulletin

36 / 2015 Gasoline and Diesel Will Continue to Dominate in the Future of Road Transport Hella Engerer, Uwe Kunert S. 469-477

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Abstract:

The transport sector - road transport, in particular - accounts for more than half of world oil consumption. In the future, the transport sector’s share of oil consumption will grow even more, primarily due to the increasing use of motor vehicles in developing and emerging countries. Road freight transport will also take on greater significance. And overall, gasoline - and, increasingly, diesel - will continue to dominate the fuel mix. A trend reversal in which road transport moves toward a more intensive use of alternative fuels such as liquefied petroleum gas (LPG) and natural gas, and alternative drive systems such as hybrid cars (HEVs) and battery electric vehicles (BEVs), still cannot be observed - despite government support. Given that gasoline and diesel will also be dominant in the future, additional efforts should be made to reduce CO2 emissions and improve the environmental friendliness of motor vehicle traffic. Given the deleterious environmental effects of diesel fuel, its preferential tax treatment should be abolished.

JEL-Classification:

Q42;L92;R41

Keywords:

Road transport, Fuels, Biofuels, Motorized Vehicles, Alternative Fuel Vehicles, Mileage Travelled