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

Mohamed El Harrak, Antonio David, Lorraine Ocampos and Marshall Mills

No 2011/102, IMF Working Papers from International Monetary Fund

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.

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 (search for similar items in EconPapers)
Pages: 30
Date: 2011-05-01
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Citations: View citations in EconPapers (3)

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Journal Article: Oil spill(over)s: linkages in petroleum product pricing policies in west african countries (2014)
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