7 mitigation responses. Table A2.1 summarizes energy diversification policies, including liquid biofuels and compressed natural gas (CNG) to substitute gasoline and diesel, and energy conservation measures.

The main report draws upon these two comprehensive tables to highlight important developments and distill lessons. The paper begins with different approaches to setting retail prices, followed by different forms of government interventions to lower prices and their effects on supply and demand, conservation and diversification measures to reduce oil consumption, and finally steps to mitigate the adverse effects of high oil prices.

# **2. Approaches to Fuel Pricing**

This study of 65 developing countries has found an array of pricing policies and mechanisms. Most study countries control prices, although the nature of control varies widely.

# **2.1 Retail prices**

The retail prices for gasoline, diesel, and kerosene converted to U.S. dollars per liter, and LPG in U.S. dollars per kilogram (kg) in July 2012 are shown in Figures A3.1–A3.4 in Appendix 3. Table 2 provides summary statistics. The wide ranges of prices for the four fuels illustrate large differences in subsidies, taxes, and costs. Turkey had the highest retail prices for gasoline, diesel, and kerosene, and the third highest for LPG, in part because of high taxes—making up 49 percent of the retail price for gasoline, 39 percent for diesel, and 32 percent for LPG for residential consumers (IEA 2012a). Uruguay closely followed Turkey for gasoline and diesel. Aside from Turkey and Uruguay, all other countries in the top five were in Sub-Saharan Africa, except Cambodia which ranked fifth for kerosene. Malawi had an exceptionally high unit price of LPG, 60 percent higher than the second highest price found in Uganda. At the opposite end of the spectrum, the lowest prices were found in República Bolivariana de Venezuela and Egypt, closely followed by the Islamic Republic of Iran and Iraq for gasoline and diesel, Indonesia and India for kerosene, and Iraq and Bolivia for LPG. República Bolivariana de Venezuela stands out as having petroleum product prices far lower than in any other country, with the exception of LPG, for which the official price in Egypt was even lower.

Table 2: Summary statistics on retail prices in July 2012

|**Statistic**|**Gasoline**|**Diesel**|**Kerosene**|**LPG**|
|---|---|---|---|---|
|Minimum price, US$/liter or US$/kg|0.02|0.01|0.18|0.04|
|Maximum price, US$/liter or US$/kg|2.20|1.97|1.60|4.74|
|Average price, US$/liter or US$/kg|1.13|1.01|0.86|1.17|
|Median price, US$/liter or US$/kg|1.17|1.05|0.93|0.99|
|Total number of countries|64|64|44|52|

_Sources_ : See Tables A2.1 in Kojima (2012) and sources under “information” in Table A1.1. _Note_ : Prices are in US$/liter for gasoline, diesel, and kerosene and US$/ kg for LPG. Prices available in Jamaica are tax-inclusive ex-refinery prices, and distribution margins can be significant. They are used for pass-through calculations but not for computing statistics on retail prices.

The prices in July 2012 were compared to those in June 2009 to compute the degree of pass through of rises in international prices to retail prices in the domestic market. Appendix 3 describes the methodology and tabulates the pass-through coefficients in individual countries. Table 3 summarizes the results. Several countries had pass-through coefficients that were less than zero, not because they lowered prices, but because their currencies depreciated against the