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Recent uncertainties in the supply of major source of energy that is oil has aroused enthusiasm in the study of the implication of increasingly scarce and higher priced energy inputs for the consumers in the constext of economic development. Thus, the price responsiveness of the consumers for fuels (especially for industrial consumers) has been extensively estimated for the developed countries and to a somewhat limited extent for developing countries, basically with two objectives in view: To estimate the feasibility and vulnerability of the consumers to rapidly changing supply and price situation through inter-fuel substitution possibilities. To deduce ‘derived demand function’ for energy inputs from the production function, taking energy input as an ‘Identifiable argument’ in the production function, thus invalidating the value added approach. This work contributes to the general trend by estimating elasticity of substitution and price elasticity for three conventional fuel types: coal, oil and electricity for the ‘energy intensive’ manufacturing industries in India with the help of a three-input translog model.
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