The six-month change in fuel prices in 96 countries
In recent months, drivers in various countries have complained that retail fuel prices have not fallen enough given the dramatic decline in crude oil prices. To investigate this issue, we calculated the six-month change (from June 2015 to January 2016) of retail gasoline prices in 96 countries across the world. During that period, crude oil prices declined by 48 percent.
In 79 of the 96 countries gasoline prices did decline but by varying degrees. In the USA and Taiwan, as well as in Panama and El Salvador, gasoline prices decreased by over 24 percent. In contrast, in 7 of the 96 countries gasoline prices did not change and in 10 countries they even increased.
It is obvious that fuel prices do not follow the decrease in oil prices in the same way in all countries. Other factors are at play too: the exchange rate against the US dollar, taxes, local regulations, the level of competition on the local market, the refining costs, the transportation and storage costs, and the retailers and wholesalers margins.
Let’s look at a few examples. Similar to most European countries, the US has a fully liberalized fuel market. However, prices in the US fell by 26 percent from June 2015 to January 2016 while the decrease was below 20 percent in Europe. The reason is that the level of taxation in the US is substantially lower. Also, in countries such as Sri Lanka, Kuwait, Egypt, and Bolivia fuel prices are controlled by the government and remain unchanged for long periods of time regardless of the changes in crude oil prices. Finally, in Argentina, the depreciation of the peso in the second half of 2015 led to a significant increase in retail fuel prices. For the same reason, pump prices increased also in Russia, Uganda, and Zambia.
See the current retail gasoline prices across the world here.