GASOLINE AND DIESEL PRICE AND INCOME ELASTICITIES

Sa？etak The paper analyzes the price and income elasticity of demand for petroleum products, gasoline and diesel. With regard to the share of petroleum products in the structure of household expenses, as well as the share in the government budget revenues, the elasticities of demand for petroleum products are one of the essential elements for the implementation of the economic policy. The paper provides a theoretical overview of elasticities. The price, income and cross-elasticity of demand and their application to petroleum products are presented. The difference between the short-run and longrun effects on the elasticity of demand for petroleum products is emphasized. The influence of fiscal policy on the elasticity of demand, with regard to both price and income, is analyzed. The conclusion is that the elasticity of demand for petroleum products (price and income) has decreased over time