Methods and interpretation of fuel price analytics

Correlation with crude oil prices

The correlation between the retail fuel prices and Brent (WTI for the U.S. and Canada) oil prices in the same month. Based on the last five years of data. The range of the correlation is from -1 to 1. Negative correlation means that fuel prices are lower when oil prices are higher. Correlation coefficient close to 0 means that fuel prices are not related to oil prices. Coefficient close to 1 means a close positive connection between oil prices and fuel prices.

Correlation with other fuel prices

The same method and interpretation as above.

Fuel prices in a given country relative to world average fuel prices

Based on the last month with available data. The world average is a simple average of the fuel prices in about 140 countries, expressed in current USD. The reported variable is the ratio of the domestic fuel price, also expressed in USD, to the world average price. Value greater/smaller than 1 means that the fuel price is higher/lower than the world average. A value of 1.27 for example means that the price in a given country is 27 percent greater than the world average.

Fuel prices in a given country relative to other fuel prices in that country

The same as above. The idea is to see whether gasoline or diesel is more expensive in a given country. For example, if Gasoline price / Diesel price = 0.90 that means that the gasoline price is about 10 percent lower than the diesel price. The calculation uses the last month with available data.

Cost of 40 liter tank as percent of income

The variable shows how much does it cost to fill a 40 liter fuel tank as percent of GDP per capita. We use the latest data on GDP per capita from the World Bank. In the calculation, we divide GDP per capita by 12 to arrive at an approximation of average monthly income.

Fuel consumption as percent of income

We use data from the U.S. Energy Information Administration on fuel consumption and our fuel price data to compute the annual spending on fuel. Then we express this as percent of GDP, taking the latest values from the World Bank.

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