The effects of oil prices on the price indices in Taiwan: International or domestic oil prices matter?

► We examine the effects of international and domestic oil prices on the price indices. ► International oil prices changes have substantial effects on the price indices. ► Domestic oil prices do not affect the price indices when oil price changes are large. ► The price indices are more sensitive to international than domestic oil prices. ► Controlling domestic oil prices to stabilize the price indices is ineffective.