## How (Not) to Price Fuel Products

_How-To Notes, June 26, 2026_

## Source details

**Canonical URL:** [How (Not) to Price Fuel Products](https://www.imf.org/en/publications/imf-how-to-notes/issues/2026/06/25/how-not-to-price-fuel-products-573777)

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## Bibliographic details
- Authors: Delphine Prady, Julieth C Pico-Mejia, Jean-François Wen, Grégoire Rota-Graziosi
- Published: June 26, 2026
- Series: How-To Notes
- DOI: https://doi.org/10.5089/9798229037051.061

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### Overview
- Half of all countries in the world regulate fuel prices through various forms of interventions in price formulas.
- Interventions pursue social, political, and economic objectives, including protecting consumers from price volatility and promoting domestic industries.
- These interventions rarely achieve their objectives and often have unintended and costly consequences.
- The How-to-Note provides guidance on the structure and components of fuel price formulas, practices to avoid, and why.

### Major findings
- Transparency is often lacking: components of fuel prices are not regularly published.
- Domestic fuel prices frequently do not reflect international market fluctuations, leading to distortions.
- Complex and numerous price interventions, including multiple taxes and parafiscal levies, increase inefficiency.
- Inconsistent treatment across similar fuel products generates inefficiencies, fraud, and smuggling.

### Core policy recommendations
- Prioritize transparency
  - Regularly publish all components of fuel prices.
- Align domestic prices with international markets
  - Reflect international market fluctuations in domestic fuel prices.
  - Foster a pricing culture that accepts some degree of price volatility.
  - Use automatic and transparent adjustments where appropriate.
- Keep interventions simple and minimal
  - Streamline fuel taxation to only a few taxes.
  - Avoid parafiscal levies.
- Ensure consistency across products
  - Subject similar fuel products to comparable pricing interventions to reduce inefficiencies, fraud, and smuggling.

### Guidance on price formula design and practice
- Structure price formulas to be simple and transparent.
- Avoid ad hoc and politically driven adjustments that break alignment with international prices.
- Design automatic, rule-based adjustments to increase predictability and reduce discretionary policy changes.
- Minimize the number of taxes and levies embedded in prices to improve administrative efficiency and reduce distortions.

*How (Not) to Price Fuel Products, How‑To Note No 2026/003, June 26, 2026.*

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_Source: https://www.imf.org/en/publications/imf-how-to-notes/issues/2026/06/25/how-not-to-price-fuel-products-573777_