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Oil Spill(over)s: Linkages in Petroleum Product Pricing Policies in West African Countries

Author

Listed:
  • Mohamed El Harrak
  • Mr. Antonio David
  • Ms. Lorraine Ocampos
  • Marshall Mills

Abstract

This paper addresses a number of issues regarding petroleum product pricing in Western Africaemphasizing international spillovers. We use panel unit root rests and long-run modeling based on vector error correction models to assess links and convergence in petroleum product prices across countries. Our results indicate that in general over the long-run there is convergence in prices across the countries. The estimation results for gasoline and diesel prices suggest the presence of long-run links between retail prices among the different country groupings with long-run multipliers ranging from 11 to -6.66. The speed of Adjustment to equilibrium varies significantly according to the countrygroupings considered. In contrast, the econometric results for kerosene prices not only indicate a weaker link between prices across countries, but also a much slower adjustment to equilibrium. Inlight of these important spillovers, the need to better coordinate pricing s and tax policies towards petroleum products at the regional level becomes apparent.

Suggested Citation

  • Mohamed El Harrak & Mr. Antonio David & Ms. Lorraine Ocampos & Marshall Mills, 2011. "Oil Spill(over)s: Linkages in Petroleum Product Pricing Policies in West African Countries," IMF Working Papers 2011/102, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/102
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    Cited by:

    1. Carlos Caceres & Marcos Poplawski-Ribeiro & Darlena Tartari, 2013. "Inflation Dynamics in the CEMAC Region," Journal of African Economies, Centre for the Study of African Economies, vol. 22(2), pages 239-275, March.
    2. Kubinschi Matei & Barnea Dinu & Zlatcu Iuliana, 2019. "Estimating fuel price volatility and spillover effects across different European countries," Management & Marketing, Sciendo, vol. 14(4), pages 419-430, December.
    3. Simone Maciel Cuiabano & Maxwell Opoku-Afari, 2018. "Exchange Rate Dynamics and Monetary Integration in the EAC Countries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 46(3), pages 267-279, September.

    More about this item

    Keywords

    WP; price differential; petroleum product price; gasoline price; IMF country desk; kerosene price; oil price shock; world price; Oil Prices; International Spillovers; Smuggling; West Africa; Fuel prices; Oil; Inflation; Price controls;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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