Dynamic Fuel Price Pass-Through: Evidence from a New Global Retail Fuel Price Database

December 23, 2016

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Format: Chicago

Kangni R Kpodar, and Chadi Abdallah. Dynamic Fuel Price Pass-Through: Evidence from a New Global Retail Fuel Price Database, (USA: International Monetary Fund, 2016) accessed December 24, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper assesses the dynamic pass-through of crude oil price shocks to retail fuel prices using a novel database on monthly retail fuel prices for 162 countries. The impulse response functions suggest that on average, a one cent increase in crude oil prices per liter translates into a 1.2 cent increase in the retail gasoline price at peak level six months after the shock. However, the estimates vary significantly across country groups, ranging from about 0.5 cent in MENA countries to two cents in advanced economies. The results also show that positive oil price shocks have a larger impact than negative price shocks on the retail gasoline price. Finally, the paper underscores the importance of the new dataset in refining estimates of the fiscal cost of incomplete pass-through.

Subject: Commodities, Energy subsidies, Expenditure, Fuel prices, Gasoline, Inflation, Oil prices, Prices

Keywords: Asia and Pacific, Energy subsidies, Europe, Fiscal cost, Fuel price, Fuel price database, Fuel price pass-through, Fuel price shock, Fuel prices, Fuel subsidies, Gasoline, Inflation, Middle East, North Africa, Oil price, Oil prices, Pass-through, Pass-through coefficient, Price, Price change, Price difference, Price differential, Price gap, Price shock, Retail fuel price, Retail fuel prices, Sub-Saharan Africa, Transportation cost, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/254
Stock No:

WPIEA2016254
ISBN:

9781475563221
ISSN:

1018-5941

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