7 Where governments conduct frequent retail price surveys and post them on the Web, the study uses monthly average prices for the country or, if country-wide average data are not available, average prices in the capital city. For countries with price control, _official_ prices averaged over the month (if prices were adjusted once or more in January) are used, even if black market prices were markedly higher, because the focus of this study for countries with price control is not on the actual prices paid by consumers but government pricing policies. In a handful of cases where one or more grades of a given fuel are subsidized but not others, the subsidized prices are used to highlight policy consequences. Details about fuel characteristics and sources of price information can be found in table A2.1 in appendix 2 and reference FOB prices in table A2.3. The inter-regional differences in the reference FOB prices varied by 7 percent or less for gasoline, diesel, and kerosene. LPG prices in contrast varied by as much as 60 percent by region—propane prices were much lower in the United States than elsewhere in January 2012, and the lowest and highest butane prices in January 2009 differed by almost 50 percent.

The pass-through coefficients as defined in this study need to be interpreted with caution. Retail prices depend not only on the reference world prices, taxes, and subsidies, but also on a number of other factors:

- _Timing of fuel purchase_ . Particularly in small markets, there may be a considerable time lag between fuel purchase and fuel sale, and world fuel prices may change markedly during that period. The smaller the market, the longer is the time interval between purchase on the world market and final retail sale. This is arguably the largest source of uncertainty in this analysis. The monthly average benchmark price of regular gasoline in Singapore was about the same in November 2008 and January 2009, but 20 percent lower in December 2008, resulting in an under-estimation of pass-through for gasoline purchased in December 2008. In Europe, the benchmark price of regular gasoline was 14 percent lower in December 2008 and 11 percent higher in November 2008 than in January 2012, leading to under-estimation and over-estimation, respectively. Diesel and kerosene prices were about the same in December 2008 and January 2009 in both Singapore and Europe, but 20 percent higher in Singapore and 30 percent higher in November 2008. The variations were smaller for January 2012. In Europe, kerosene and diesel prices were within 3 percent of the January 2012 prices in the preceding two months, while the benchmark price of regular gasoline was about 5 percent lower. In Singapore, diesel and kerosene prices were the same in January 2012 and November 2012 and 3–4 percent lower in December 2011, while the price of regular gasoline was 8 percent lower in November and December 2011 than in January 2012. Correcting for this factor, however, would entail a detailed analysis of each individual market including the status of the refined product inventory in the relevant periods. Such a large undertaking is beyond the scope of this study.

- _Fuel quality_ . The octane grade of gasoline and the sulfur content of diesel are two of the most important fuel characteristics that affect the price. As an illustration, diesel prices