Government Response to Oil Price Volatility : Experience of 49 Developing Countries
Oil prices rose from 2004 to historic highs in mid-2008, only to fall precipitously in the last four months of 2008 and lose all the gains of the preceding four and a half years. The steep price increase from January 2007 to July 2008 was challengi...
| Main Author: | |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2009/07/11215307/government-response-oil-price-volatility-experience-49-developing-countries http://hdl.handle.net/10986/18234 |
| Summary: | Oil prices rose from 2004 to historic
highs in mid-2008, only to fall precipitously in the last
four months of 2008 and lose all the gains of the preceding
four and a half years. The steep price increase from January
2007 to July 2008 was challenging for all economies. While
the sharp drop in prices since August 2008 has been welcome
news for consumers, the cause of it, the global financial
crisis, is not. Moreover, currency depreciation against the
dollar in many developing countries has meant that, in local
currency units, petroleum product prices have not fallen as
sharply as in U.S. dollars. This report examines the policy
responses of 49 developing country governments to world oil
price movements in the last three years. The sample includes
16 countries in Sub-Saharan Africa, 15 in Asia, 10 in Latin
America, and 8 in the Middle East and North Africa. The
report updates a companion 2006 publication on coping with
higher oil prices and builds upon two other publications:
one on oil price volatility and another on the degree of
pass-through of world oil price increases between January
2004 and August 2009. As with all other publications in this
series, this report examines issues related to oil price
levels and volatility in the downstream petroleum sector and
other sectors where oil is an important input, such as
transport, fisheries, and agriculture, from the point of
view of consumers. It does not consider macro-level policies
(such as monetary or exchange rate policy) or the impact of
oil price changes on the macroeconomic performance of
countries, nor does it discuss management of the windfall
income by large oil exporters and the long-term economic
consequences of revenue management. |
|---|