Publication: A Global Assessment of Domestic Petroleum Fuel Prices
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2025-06-26
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2025-06-26
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Oil prices have been increasingly volatile since 2004. However, the impact of this volatility on domestic end-user prices differs significantly by fuel and country. Some countries fully pass through global price movements to domestic end-user prices, and some countries freeze domestic fuel prices for long periods of time. Fuel subsidies emerge or grow if domestic prices significantly diverge from international prices in times of rising international oil prices. This paper draws on two new databases developed by the author for the purposes of this paper to analyze the degree of pass-through of international price volatility onto domestic consumers for eight fuels between December 2017 and December 2023 for up to 125 economies, depending on the fuel. This period saw significant oil price volatility on account of events such as the COVID-19 pandemic and the war in Ukraine. The paper finds that domestic prices in many countries did not follow international fuel prices within the period analyzed. Countries with price controls had much lower levels of pass-through than those with price deregulation. Countries that adjusted their fuel prices at frequent intervals (weekly or monthly) had higher levels of price pass-through than those adjusting them quarterly or less frequently. Currency depreciation and the existence of an official fuel subsidy are associated with lower levels of price pass-through, and the impact of being a net crude oil or net refined fuel exporter is mixed. The results show that not tracking international prices closely is associated with higher incidences of fuel shortages, fuel smuggling, and fuel black marketing.
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“Akcura, Elcin. 2025. A Global Assessment of Domestic Petroleum Fuel Prices. Policy Research Working Paper; 11153. © World Bank. http://hdl.handle.net/10986/43388 License: CC BY 3.0 IGO.”
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