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...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/05/17784262/political-determinants-fossil-fuel-pricing http://hdl.handle.net/10986/15569 |
| Summary: | 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. |
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