Dynamic Fuel Price Pass-Through: Evidence from a New Global Retail Fuel Price Database
IMF Working Papers, December 23, 2016
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- Dynamic Fuel Price Pass-Through: Evidence from a New Global Retail Fuel Price Database
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Bibliographic details
- Authors: Kangni R Kpodar, Chadi Abdallah
- Published: December 23, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475563221.001
Objective and data
- Assesses the dynamic pass-through of crude oil price shocks to retail fuel prices.
- Uses a novel database on monthly retail fuel prices for 162 countries.
Key empirical findings
- 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.
- Estimates vary significantly across country groups:
- about 0.5 cent in MENA countries
- two cents in advanced economies
- Positive oil price shocks have a larger impact than negative price shocks on the retail gasoline price.
Implications for fiscal cost and measurement
- The paper underscores the importance of the new dataset in refining estimates of the fiscal cost of incomplete pass-through.
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- Dynamic Fuel Price Pass-Through: Evidence from a New Global Retail Fuel Price Database