Drawing a Roadmap for Reforming Oil Pricing Policy
Between 2003 and 2012 the average annual world prices of gasoline, diesel, and kerosene in 160 countries more than doubled, while the prices of liquefied petroleum gas (LPG) used for cooking and heating increased by two-thirds. Between January 2009...
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| Format: | Energy Study |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2013/01/18019482/drawing-roadmap-reforming-oil-pricing-policy http://hdl.handle.net/10986/16528 |
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okr-10986-16528 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO ELECTRICITY ADVERSE EFFECTS APPROACH BLACK MARKET BLACK MARKETS CLIMATE COMMODITIES CORPORATE TAX DELIVERY MECHANISM DELIVERY MECHANISMS DEREGULATION DEVELOPING COUNTRIES DIESEL DOMESTIC INFLATION DOMESTIC PRICES DRAWN DOWN EFFICIENCY IMPROVEMENT ELECTRICITY ELECTRICITY GENERATION ELECTRICITY SECTOR ELECTRICITY TARIFF ELECTRICITY TARIFFS ELECTRICITY UTILITIES ELECTRONIC COMMUNICATION ENERGY CONSERVATION ENERGY EFFICIENCY ENERGY PRICES EXPENDITURE EXPENDITURES FAIR FINANCIAL CRISIS FINANCIAL INCENTIVES FINANCIAL LOSSES FOOD PRICES FUEL FUEL CONSUMPTION FUEL OIL FUEL PRICES FUEL SWITCHING FUELS GASOLINE GOVERNMENT INTERVENTIONS HIGHER ENERGY PRICES IMPORTS INCOME INCOME GROUP INCOME GROUPS INFLATION KEROSENE LIQUID FUELS LOCAL CURRENCY LOW-INCOME COUNTRIES LOWER COSTS MARKET CONCENTRATION MARKET POWER MARKET PRICES MARKET STRUCTURE MARKETING MEANS OF COMMUNICATION MIDDLE-INCOME COUNTRIES MONOPOLY NATURAL DISASTERS NATURAL GAS OIL OIL COMPANIES OIL COMPANY OIL CONSUMPTION OIL DEMAND OIL EXPORTS OIL PRICE OIL PRICES OIL PRICING OIL PRICING POLICY OIL PRODUCER OIL PRODUCTS OIL SECTOR PETROLEUM PETROLEUM GAS POLICY IMPLICATIONS POLITICAL ECONOMY POLITICAL SYSTEM POTENTIAL INVESTORS POVERTY ALLEVIATION PRICE ADJUSTMENT PRICE ADJUSTMENTS PRICE CEILINGS PRICE COMPETITION PRICE CONTROLS PRICE INCREASE PRICE INCREASES PRICE LEVELS PRICE SUBSIDIES PRICE VARIATION PRICE VOLATILITY PRICING MECHANISM PRICING POLICIES PRICING REFORM REGULATORY AGENCY RETAIL RETAIL PRICES SAVINGS SCANDALS SMALL BUSINESSES SMART CARD SOCIAL PROTECTION SOCIAL SAFETY NETS SUSTAINABLE ENERGY TAX TRACK RECORD TRANSPARENCY TRANSPARENCY INITIATIVE UNINTENDED CONSEQUENCES WORLD MARKET |
| spellingShingle |
ACCESS TO ELECTRICITY ADVERSE EFFECTS APPROACH BLACK MARKET BLACK MARKETS CLIMATE COMMODITIES CORPORATE TAX DELIVERY MECHANISM DELIVERY MECHANISMS DEREGULATION DEVELOPING COUNTRIES DIESEL DOMESTIC INFLATION DOMESTIC PRICES DRAWN DOWN EFFICIENCY IMPROVEMENT ELECTRICITY ELECTRICITY GENERATION ELECTRICITY SECTOR ELECTRICITY TARIFF ELECTRICITY TARIFFS ELECTRICITY UTILITIES ELECTRONIC COMMUNICATION ENERGY CONSERVATION ENERGY EFFICIENCY ENERGY PRICES EXPENDITURE EXPENDITURES FAIR FINANCIAL CRISIS FINANCIAL INCENTIVES FINANCIAL LOSSES FOOD PRICES FUEL FUEL CONSUMPTION FUEL OIL FUEL PRICES FUEL SWITCHING FUELS GASOLINE GOVERNMENT INTERVENTIONS HIGHER ENERGY PRICES IMPORTS INCOME INCOME GROUP INCOME GROUPS INFLATION KEROSENE LIQUID FUELS LOCAL CURRENCY LOW-INCOME COUNTRIES LOWER COSTS MARKET CONCENTRATION MARKET POWER MARKET PRICES MARKET STRUCTURE MARKETING MEANS OF COMMUNICATION MIDDLE-INCOME COUNTRIES MONOPOLY NATURAL DISASTERS NATURAL GAS OIL OIL COMPANIES OIL COMPANY OIL CONSUMPTION OIL DEMAND OIL EXPORTS OIL PRICE OIL PRICES OIL PRICING OIL PRICING POLICY OIL PRODUCER OIL PRODUCTS OIL SECTOR PETROLEUM PETROLEUM GAS POLICY IMPLICATIONS POLITICAL ECONOMY POLITICAL SYSTEM POTENTIAL INVESTORS POVERTY ALLEVIATION PRICE ADJUSTMENT PRICE ADJUSTMENTS PRICE CEILINGS PRICE COMPETITION PRICE CONTROLS PRICE INCREASE PRICE INCREASES PRICE LEVELS PRICE SUBSIDIES PRICE VARIATION PRICE VOLATILITY PRICING MECHANISM PRICING POLICIES PRICING REFORM REGULATORY AGENCY RETAIL RETAIL PRICES SAVINGS SCANDALS SMALL BUSINESSES SMART CARD SOCIAL PROTECTION SOCIAL SAFETY NETS SUSTAINABLE ENERGY TAX TRACK RECORD TRANSPARENCY TRANSPARENCY INITIATIVE UNINTENDED CONSEQUENCES WORLD MARKET Kojima, Masami Drawing a Roadmap for Reforming Oil Pricing Policy |
| description |
Between 2003 and 2012 the average annual
world prices of gasoline, diesel, and kerosene in 160
countries more than doubled, while the prices of liquefied
petroleum gas (LPG) used for cooking and heating increased
by two-thirds. Between January 2009 and January 2013, many
countries did not pass through increases in world oil
product prices to domestic consumers. The median
pass-through for gasoline and diesel increased with income
and was less than two-thirds in low- income countries.
High-income countries had larger median pass-through
coefficients than any other income group. For kerosene, the
median pass-through was full in upper-middle-income
countries, but half in low and lower-middle-income
countries. Among developing countries, the median
pass-through for LPG was highest in low-income countries.
More generally, about two thirds of the study countries have
kept domestic prices below market-based levels for one or
more fuels in the past three years, subsidizing consumers.
In every case the government pays directly-or indirectly
through budgetary transfers, tax expenditures, or lower
corporate tax collection due to financial losses suffered by
oil companies. Many countries have universal price
subsidies, widely acknowledged to be regressive. Quite a few
have subsidies targeting certain consumer categories, most
notably kerosene and LPG for households. Targeted subsidies
for oil products have large leakages (such as diversion and
smuggling) because, unlike electricity or natural gas,
liquid fuels are easy to store and transport.
Differentiating prices for the same oil product by user
category creates powerful financial incentives to divert
lower-priced fuels to users ineligible for the price
discounts. Typical recipients of such targeted price
subsidies are households (kerosene or LPG for cooking,
lighting, and heating), transport operators, farmers, and
fishermen. Although prices of kerosene and diesel are close
on the world market, many governments price kerosene below
diesel in the name of protecting non-electrified households
that use kerosene for cooking, lighting, and heating.
Government transparency is important regarding the agency in
charge of pricing, the scope of its regulatory power, how
prices are set, the criteria for price adjustments, the
price breakdown, the magnitude of under-or-over recoveries,
and the stakeholders being consulted. |
| format |
Economic & Sector Work :: Energy Study |
| author |
Kojima, Masami |
| author_facet |
Kojima, Masami |
| author_sort |
Kojima, Masami |
| title |
Drawing a Roadmap for Reforming Oil Pricing Policy |
| title_short |
Drawing a Roadmap for Reforming Oil Pricing Policy |
| title_full |
Drawing a Roadmap for Reforming Oil Pricing Policy |
| title_fullStr |
Drawing a Roadmap for Reforming Oil Pricing Policy |
| title_full_unstemmed |
Drawing a Roadmap for Reforming Oil Pricing Policy |
| title_sort |
drawing a roadmap for reforming oil pricing policy |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2013/01/18019482/drawing-roadmap-reforming-oil-pricing-policy http://hdl.handle.net/10986/16528 |
| _version_ |
1764433933235126272 |
| spelling |
okr-10986-165282021-04-23T14:03:31Z Drawing a Roadmap for Reforming Oil Pricing Policy Kojima, Masami ACCESS TO ELECTRICITY ADVERSE EFFECTS APPROACH BLACK MARKET BLACK MARKETS CLIMATE COMMODITIES CORPORATE TAX DELIVERY MECHANISM DELIVERY MECHANISMS DEREGULATION DEVELOPING COUNTRIES DIESEL DOMESTIC INFLATION DOMESTIC PRICES DRAWN DOWN EFFICIENCY IMPROVEMENT ELECTRICITY ELECTRICITY GENERATION ELECTRICITY SECTOR ELECTRICITY TARIFF ELECTRICITY TARIFFS ELECTRICITY UTILITIES ELECTRONIC COMMUNICATION ENERGY CONSERVATION ENERGY EFFICIENCY ENERGY PRICES EXPENDITURE EXPENDITURES FAIR FINANCIAL CRISIS FINANCIAL INCENTIVES FINANCIAL LOSSES FOOD PRICES FUEL FUEL CONSUMPTION FUEL OIL FUEL PRICES FUEL SWITCHING FUELS GASOLINE GOVERNMENT INTERVENTIONS HIGHER ENERGY PRICES IMPORTS INCOME INCOME GROUP INCOME GROUPS INFLATION KEROSENE LIQUID FUELS LOCAL CURRENCY LOW-INCOME COUNTRIES LOWER COSTS MARKET CONCENTRATION MARKET POWER MARKET PRICES MARKET STRUCTURE MARKETING MEANS OF COMMUNICATION MIDDLE-INCOME COUNTRIES MONOPOLY NATURAL DISASTERS NATURAL GAS OIL OIL COMPANIES OIL COMPANY OIL CONSUMPTION OIL DEMAND OIL EXPORTS OIL PRICE OIL PRICES OIL PRICING OIL PRICING POLICY OIL PRODUCER OIL PRODUCTS OIL SECTOR PETROLEUM PETROLEUM GAS POLICY IMPLICATIONS POLITICAL ECONOMY POLITICAL SYSTEM POTENTIAL INVESTORS POVERTY ALLEVIATION PRICE ADJUSTMENT PRICE ADJUSTMENTS PRICE CEILINGS PRICE COMPETITION PRICE CONTROLS PRICE INCREASE PRICE INCREASES PRICE LEVELS PRICE SUBSIDIES PRICE VARIATION PRICE VOLATILITY PRICING MECHANISM PRICING POLICIES PRICING REFORM REGULATORY AGENCY RETAIL RETAIL PRICES SAVINGS SCANDALS SMALL BUSINESSES SMART CARD SOCIAL PROTECTION SOCIAL SAFETY NETS SUSTAINABLE ENERGY TAX TRACK RECORD TRANSPARENCY TRANSPARENCY INITIATIVE UNINTENDED CONSEQUENCES WORLD MARKET Between 2003 and 2012 the average annual world prices of gasoline, diesel, and kerosene in 160 countries more than doubled, while the prices of liquefied petroleum gas (LPG) used for cooking and heating increased by two-thirds. Between January 2009 and January 2013, many countries did not pass through increases in world oil product prices to domestic consumers. The median pass-through for gasoline and diesel increased with income and was less than two-thirds in low- income countries. High-income countries had larger median pass-through coefficients than any other income group. For kerosene, the median pass-through was full in upper-middle-income countries, but half in low and lower-middle-income countries. Among developing countries, the median pass-through for LPG was highest in low-income countries. More generally, about two thirds of the study countries have kept domestic prices below market-based levels for one or more fuels in the past three years, subsidizing consumers. In every case the government pays directly-or indirectly through budgetary transfers, tax expenditures, or lower corporate tax collection due to financial losses suffered by oil companies. Many countries have universal price subsidies, widely acknowledged to be regressive. Quite a few have subsidies targeting certain consumer categories, most notably kerosene and LPG for households. Targeted subsidies for oil products have large leakages (such as diversion and smuggling) because, unlike electricity or natural gas, liquid fuels are easy to store and transport. Differentiating prices for the same oil product by user category creates powerful financial incentives to divert lower-priced fuels to users ineligible for the price discounts. Typical recipients of such targeted price subsidies are households (kerosene or LPG for cooking, lighting, and heating), transport operators, farmers, and fishermen. Although prices of kerosene and diesel are close on the world market, many governments price kerosene below diesel in the name of protecting non-electrified households that use kerosene for cooking, lighting, and heating. Government transparency is important regarding the agency in charge of pricing, the scope of its regulatory power, how prices are set, the criteria for price adjustments, the price breakdown, the magnitude of under-or-over recoveries, and the stakeholders being consulted. 2014-01-08T22:28:57Z 2014-01-08T22:28:57Z 2013 http://documents.worldbank.org/curated/en/2013/01/18019482/drawing-roadmap-reforming-oil-pricing-policy http://hdl.handle.net/10986/16528 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work :: Energy Study Economic & Sector Work |