Oil Spill(over)s [electronic resource] : Linkages in Petroleum Product Pricing Policies in West African Countries / Mohamed El Harrak.

By: El Harrak, MohamedContributor(s): David, Antonio | El Harrak, Mohamed | Mills, Marshall | Ocampos, LorraineMaterial type: TextTextSeries: IMF Working Papers; Working Paper ; No. 11/102Publication details: Washington, D.C. : International Monetary Fund, 2011Description: 1 online resource (30 p.)ISBN: 1455260371 :ISSN: 1018-5941Subject(s): Gasoline Prices | International Spillovers | Petroleum Prices | Petroleum Product Prices | Petroleum Products | Unit Root | Benin | Burkina Faso | Ghana | Nigeria | TogoAdditional physical formats: Print Version:: Oil Spill(over)s : Linkages in Petroleum Product Pricing Policies in West African CountriesOnline resources: IMF e-Library | IMF Book Store 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.
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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.

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