In 2021, the global average price of gasoline1 at the pump was 1.03 US dollar per litre (USD/l), a 26% increase from the previous year, exceeding pre COVID-19 pandemic levels. The rebound was mostly due to a sustained increase in the price of crude oil throughout 2021 amid economic recovery. Price levels varied greatly across countries: from 0.32 USD/l in Algeria to over seven times that amount in the Netherlands (2.15 USD/l). Many factors explain price differences, but it’s worth noting the former is a crude oil exporter while the latter is an importing country with high demand and higher taxes.

Variations of gasoline prices are closely related to crude oil, this is also relevant in countries with high tax rates as those rates are usually not subject to significant changes on a monthly basis. Following crude oil prices hike in early 2022, many governments put measures in place in order to reduce the burden on households, decoupling the price from crude, such as for Italy in April 2022.

In all countries, prices at the pump are influenced by spot crude oil prices and regulation frameworks. Governments can let retail prices float freely, or fix them. In countries where the end-user price is closely controlled, it often doesn’t reflect crude oil price fluctuations. For instance, the figure above shows prices in Saudi Arabia and Bahrain remain flat despite crude oil fluctuations because their governments fix the end-use price and subsidize consumption.

Geographical variations in transport fuel prices exist within a country due to factors including pricing framework, sub-national taxes, distribution costs (proximity of consumers to suppliers), marketing costs (retail competition and margins) and refining costs (different environmental regulations).

For example, gasoline prices across Spain are more homogenous -- due to country size, transport network and national price regulations -- compared with Brazil, where prices are market-based and affected by local taxes.

Electricity prices for residential use are generally higher and also vary more across countries than those for industry.

At a global level, the consumption-weighted electricity price for industry falls between the median and 25^th percentile, showing that countries where prices are relatively lower tend to have a relatively greater specialisation for industrial sectors.

Electricity prices for residential use have a wider spread and seem to follow a bimodal distribution across countries, while the distribution of electricity prices for industry shows less variability, probably due to the fact that market regulations tend to keep the price for industry low to maintain competitiveness.