The relationship between economic growth and oil consumption: Evidence from Türkiye

Economic growth is often considered a crucial indicator of a country's development. In Türkiye, the increasing demand for energy since the 1970s has significantly impacted economic growth. While coal was one of the prominent fossil energy sources until the 1970s, the demand for petroleum surpassed coal after the 1973 crisis. Currently, petroleum is the most consumed energy source in Türkiye, followed by coal, natural gas, and renewable energy sources. This study analyzes the relationship between economic growth and petroleum consumption in Türkiye from 1990 to 2021 using the ARDL bound test and the Toda Yamamoto causality test. The results of the cointegration test indicate a long-run relationship among the variables, suggesting that they move together over the long run. Subsequently, long-run coefficients were estimated, revealing that the increase in petroleum consumption has a positive impact on economic growth. However, the results of the Toda Yamamoto causality test suggest the absence of a causal relationship between economic growth and petroleum consumption. Policies aiming to increase or incentivize petroleum consumption, as well as those developed in a reducing or saving-oriented manner in Türkiye, have been found to have no impact on economic growth. Thus, it has been determined that petroleum alone cannot be a factor in the realization of economic growth.