A novel modification of ARX to generalize crude oil consumption model

A general model of oil consumption is investigated in this study. This model should be applicable to different countries even with different characteristics. Conventional model that works very well for Malaysia is tested with seven developing Asian countries: China, India, Indonesia, Malaysia, Pakistan, Philippines, and Thailand. The results have shown that this model can not produce a good fit to original data. A modification of Autoregressive Exogenous (ARX) model is proposed and tested. Data are separated into training and validation dataset where the number of validation dataset is higher than the number of training dataset. The results have shown that the proposed model can be considered as a general model where all countries except Philippines can produce a good fit to original data.