6 GIZ conducts a global survey of gasoline and diesel prices in November every other year, the most recent having been completed in November 2012. It is also setting up a database of fuel pricing policy fact sheets, currently covering 136 countries and regions (Energypedia 2013). GIZ recently issued a sourcebook for policymakers on how to increase the energy efficiency of urban transport, one outcome of which would be a reduction in fuel consumption (GIZ 2012). YépezGarcía and Dana (2012) reviewed how the power sector in oil-importing countries in Latin America and the Caribbean had handled exposure to oil price risk and propose a menu of options that include hedging, diversification from oil, energy efficiency improvement, and regional integration. Given the recent oil price levels, many reports on fuel price subsidies have been issued. They include a joint report by four international organizations on fossil fuel subsidies (IEA et al. 2011), various reports including case studies of fossil fuel subsidies published by the Global Subsidies Initiative (GSI), evidence on energy subsidies in developing countries (Vagliasindi 2012 and 2013), and papers by the staff of the International Monetary Fund (IMF), including IMF (2013a, 2013b), Arze del Granado, Coady, and Gillingham (2012), Coady, Flamini, and Antonio (2012), Guillaume, Zytek, and Farzin (2011), and Coady et al. (2010).

This paper complements the above work by including more recent developments, the impact of interlinkages among different sectors on supply and prices, the impact of government policies on supply conditions, and unintended consequences of government policies. It also includes two specific mitigation policies to reduce demand for petroleum products: diversification and energy efficiency improvement. It addresses gasoline, diesel, kerosene, and liquefied petroleum gas (LPG), the last of which is widely used for cooking and heating in many countries and less covered in other studies. The paper provides the policy context for a recently published study on vulnerability to oil price risks and domestic retail price adjustments (Kojima 2012) and covers the same 65 developing countries (Table 1).

Table 1: Characteristics of study countries

|**Feature**|**Number of countries**|
|---|---|
|Income category|16 low income, 24 lower-middle income, and 25 upper-middle<br>income|
|Region|9 in East Asia and Pacific, 4 in Europe and Central Asia, 17 in<br>Latin America and the Caribbean, 8 in Middle East and North<br>Africa, 5 in South Asia, and 22 in Sub-Saharan Africa|
|Status of domestic refining industry|46 with domestic refineries|
|Net oil export status|18 net oil exporters in 2010|
|Reliance on oil-based power generation|32 relying on petroleum products for 20% or more of power<br>generated in 2010|

_Sources_ : Kojima 2012; IEA 2012b; _Oil and Gas Journal_ 2012.

This paper uses the numerical notation adopted in the United States. A billion is a thousand million (10<sup>9</sup> ) and a trillion is a million million (10<sup>12</sup> ), in contrast to other parts of the world where a billion is a million million and a trillion is 10<sup>18</sup> . Exchange rates used to convert from local currency units to U.S. dollars are those prevailing at the time the prices, costs, or subsidies are quoted. Where the period covers several months or years, the average exchange rate is computed first to convert the amount into local currency. The same amount in local currency is likely to be different in U.S. dollars at different points in time.

The experience of the 65 countries is presented as case studies in Appendices 1 and 2. Table A1.1 describes the pricing policies, subsidies and their consequences, demand and supply conditions, assistance to consumers, and in some cases hedging, strategic stockholding, and other