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Dynamic fuel price pass-through: Evidence from a new global retail fuel price database

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  • Kpodar, Kangni
  • Abdallah, Chadi

Abstract

We estimate the dynamic effects of crude oil price shocks on retail fuel prices, the pass-through, using the local projection approach of Jordà (2005). Using a novel monthly dataset of retail fuel prices in 162 countries over the period from 2000:1 to 2014:12, we find that: (i) retail gasoline prices respond positively to crude oil price shocks, but the responses vary across regions and income groups; (ii) there is also some variation across country groups in the persistence of the effects of crude oil price shocks on retail gasoline prices; and (iii) declines in crude oil prices lead to smaller effects on retail gasoline prices than increases in crude oil prices, pointing to an asymmetry in the fuel price pass-through.

Suggested Citation

  • Kpodar, Kangni & Abdallah, Chadi, 2017. "Dynamic fuel price pass-through: Evidence from a new global retail fuel price database," Energy Economics, Elsevier, vol. 66(C), pages 303-312.
    • Handle: RePEc:eee:eneeco:v:66:y:2017:i:c:p:303-312
    DOI: 10.1016/j.eneco.2017.06.017
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    References listed on IDEAS

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    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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