This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.

This volume, originally published in 1984, analyzes the impact of the 1973-74 oil price increases on the Appalachian coal industry in the USA, which would otherwise have suffered large output reductions as a result of sulfur emission restrictions. Although focussed on a particular geographical region and timeframe, this book has enduring relevance as it analyzes and discusses many of the issues which are still facing the ailing coal mining industries both in the USA and globally: the advent of new energy forms, increased competition from cheaper sources, strict pollution legislation and the impact that all of these issues have on productivity and employment.