A model of the interdependence between energy and the macro-economy is developed and estimated. The model is kept general enough to be applicable to a vide range of oil-dependent developing economies. As a test case, the model is estimated only with Indian data. The results of econometric estimation are highly encouraging. Primary energy demand is found to be price responsive. Further, the coupling between energy use and the macro-economy comes through very clearly in the estimates. Static and dynamic simulations of the model show high degrees of reliability in the models’ ability to predict the historical behaviour of all the decision variables.