Political Determinants of Fossil Fuel Pricing

This paper provides an empirical analysis of economic and political determinants of gasoline and diesel prices for about 200 countries over the period 1991-2010. A range of both political and economic variables are found to systematically influence fuel prices, and in ways that differ systematically with countries per-capita income levels. For democracies, the analysis finds that fuel prices correlate positively with both duration of democracy and tenure of democratic leaders. In non-democratic societies there is more often no such relationship or it is the opposite of that for democracies. Regime switches -- transitions from non-democratic to democratic government, or vice versa -- reduce fuel prices. Fuel prices are also lower for more corrupt, or more centralized, governments. Higher levels of gross domestic product per capita lead to higher fuel prices, while export income from selling fossil fuels reduces these prices dramatically. Higher motor fuel consumption also appears to reduce fuel prices, most for gasoline. Absolute "pass-through" of crude oil price changes to fuel prices is found to be high on average.

Bibliographic Details

Main Authors:	van Beers, Cees, Strand, Jon
Format:	Policy Research Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2013-05
Subjects:	ACCESS TO ENERGY, AVAILABILITY, BARRIER, BENCHMARK, CAR, CAR OWNERS, CAR OWNERSHIP, CARBON EMISSIONS, CARS, CLIMATE CHANGE, COMMODITIES, COMPETITIVENESS, CONSUMERS, CONSUMPTION LEVELS, COST OF ENERGY, COUNTRY FIXED EFFECT, CRUDE OIL, CRUDE OIL PRICE, DEBT, DEMAND FOR GASOLINE, DEMOCRACIES, DEMOCRACY, DEMOCRATIC SOCIETIES, DEVELOPING COUNTRIES, DEVELOPMENT POLICY, DEVELOPMENT PROJECTS, DIESEL, DIESEL USE, DOMESTIC ENERGY, DOMESTIC MARKET, ECONOMIC DEVELOPMENT, ECONOMIC SYSTEMS, ECONOMIES OF SCALE, ELECTRICITY, EMPLOYMENT, ENERGY CONSUMPTION, ENERGY COSTS, ENERGY EXPORTS, ENERGY PRICES, ENERGY PRICING, ENERGY PRODUCTION, ENERGY SUPPLY, ENERGY USE, EXPORT MARKETS, EXPORTS, EXTERNALITIES, EXTERNALITY, FOSSIL, FOSSIL ENERGY, FOSSIL FUEL, FOSSIL FUEL CONSUMPTION, FOSSIL FUEL ENDOWMENTS, FOSSIL FUEL ENERGY, FOSSIL FUEL PRICES, FOSSIL FUEL USE, FOSSIL FUELS, FUEL CONSUMPTION, FUEL PRICE, FUEL PRICES, FUEL PRODUCERS, FUEL PUMP, FUEL SUBSIDIES, FUEL TAX, FUEL TAX RATES, FUEL TAXATION, FUEL TAXES, FUEL VOLUME, GAS CONSUMPTION, GAS PRICES, GASOLINE, GASOLINE CONSUMPTION, GASOLINE PRICES, GDP, GDP PER CAPITA, GLOBAL CLIMATE, GLOBAL CLIMATE CHANGE, GOVERNANCE INDICATORS, GOVERNMENT BUDGET, GOVERNMENT EXPENDITURES, GRID CONNECTIONS, GROSS DOMESTIC PRODUCT, GROSS DOMESTIC PRODUCT PER CAPITA, INCOME, INCOME GROUP, INCOME GROUPS, INCOME LEVELS, KEROSENE, KEROSENE SUBSIDIES, LESS DEVELOPED COUNTRIES, LOW-INCOME COUNTRIES, MARKET PRICE, MIDDLE INCOME COUNTRIES, MIDDLE-INCOME COUNTRIES, MONOPOLIES, MOTOR FUEL, MOTOR FUELS, MOTOR VEHICLE, MOTOR VEHICLE TRAFFIC, MOTOR VEHICLE USE, MOTOR VEHICLES, NATURAL GAS, NEGATIVE EXTERNALITIES, NET OIL, OIL EXPORTER, OIL EXPORTERS, OIL IMPORTING COUNTRIES, OIL OUTPUT, OIL PRICES, OIL SUPPLY, OPPORTUNITY COSTS, PASSENGER CARS, POLITICAL BUSINESS CYCLE, POLITICAL DETERMINANTS, POLITICAL ECONOMY, POLITICAL POWER, POLITICAL REGIME, POLITICAL STABILITY, POLITICAL SYSTEM, POLLUTION, POLLUTION LEVELS, POSITIVE EFFECTS, POVERTY ALLEVIATION, POWER, POWER DISTRIBUTION, POWER PARITY, PRICE CHANGES, PRICE DISTORTIONS, PRICE INCREASES, PRICE LEVELS, PRIVATE TRANSPORT, PROPORTIONAL REPRESENTATION, PUBLIC FINANCES, PUBLIC GOOD, PURCHASING POWER, REGIME CHANGE, REGULAR GASOLINE, RESTRICTIONS, ROAD, ROAD TRAFFIC, ROAD TRANSPORT, ROADS, SAFETY, TAX, TAX REVENUE, TAX REVENUES, TRANSPORTATION, TRAVEL DISTANCES, TRUE, UTILITIES, VEHICLES, VOTERS, WEALTH, WORLD MARKET,
Online Access:	http://documents.worldbank.org/curated/en/2013/05/17784262/political-determinants-fossil-fuel-pricing http://hdl.handle.net/10986/15569
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