Dynamic fuel price pass-through: Evidence from a new global retail fuel price database

- A novel monthly dataset of retail fuel prices in 162 countries
- The gasoline price response to crude oil price shocks, as well as the persistence in the pass-through vary significantly across country groups.
- There is evidence of asymmetric price response to positive and negative crude oil price shocks.

We estimate the dynamic effects of crude oil price shocks on retail fuel prices, the pass-through, using the local projection approach of Jordà (2005). Using a novel monthly dataset of retail fuel prices in 162 countries over the period from 2000:1 to 2014:12, we find that: (i) retail gasoline prices respond positively to crude oil price shocks, but the responses vary across regions and income groups; (ii) there is also some variation across country groups in the persistence of the effects of crude oil price shocks on retail gasoline prices; and (iii) declines in crude oil prices lead to smaller effects on retail gasoline prices than increases in crude oil prices, pointing to an asymmetry in the fuel price pass-through.