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Drawing a Roadmap for Oil Pricing ReformIn 2011, the median oil imports rose to 5 percent of gross domestic product for net importers. In the past several years, many governments have not passed through the world oil price increases to consumers fully. As a sign of divergent pricing policies, the retail prices of gasoline, diesel, and cooking gas in January 2013 varied by a factor of 190, 250, and 70, respectively, across developing countries. Policies to keep oil product prices low to benefit the economy and protect the poor have had a number of unintended negative consequences, including flourishing corruption in the oil sector and entrenchment of monopoly operators or inefficient firms through which subsidies are channeled, stifling competition and raising costs. The path to market-based pricing depends on the starting conditions: the gap between current and market-based price levels, the level of public awareness about the extent of departure from market prices, the degree of market concentration and competition in downstream oil, the subsidy delivery mechanism where subsidies are provided, the robustness of social service delivery, and the perceived credibility of the government. The evidence presented in this paper suggests that pricing reform often does not have a clear end and should instead be viewed as a continuous process of adjustment and search for mechanisms that take into account the country's institutions and political system, and the oil sector's market structure, infrastructure, and history.
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International Grain Reserves : And Other Instruments to Address Volatility in Grain MarketsIn the long view, recent grain price
 volatility is not anomalous. Wheat, rice, and maize are
 highly substitutable in the global market for calories, and
 when aggregate stocks decline to minimal feasible levels,
 prices become highly sensitive to small shocks, consistent
 with storage models. In this decade, stocks have declined
 due to high income growth and biofuels mandates. Recently,
 shocks including the Australian drought and biofuels demand
 boosts due to the oil price spike were exacerbated by a
 sequence of trade restrictions by key exporters beginning in
 the thin global rice market in the fall of 2007, which
 turned market anxiety into panic. To protect vulnerable
 consumers, countries intervened in storage markets and, if
 they were exporters, to limit trade access. Recognizing
 these realities, vulnerable countries are building strategic
 reserves. The associated expense and negative incentive
 effects can be controlled if reserves have quantitative
 targets related to the consumption needs of the most
 vulnerable, with distribution to the latter only in severe
 emergencies. More-ambitious plans manipulate world prices
 via buffer stocks or naked short speculation to keep prices
 consistent with fundamentals. Past interventions of either
 kind have been expensive, ineffective, and generally
 short-lived. Further, there is no significant evidence that
 prices do not reflect fundamentals, including export market access.
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Reforming Fuel Pricing in an Age of $100 OilIncreases in world oil prices since 2004 have challenged consumers and oil-importing countries across the world. Oil prices temporarily fell sharply in 2009, only to triple three years later. The oil import share of gross domestic product rose by nearly half among net oil importers in just two years between 2009 and 2011. Governments that control oil product prices have come under pressure to intervene by keeping domestic prices low and effectively subsidizing consumers. This study focuses on the evolving role of oil in national economies, particularly those of developing countries, and proposes a menu of options for drawing a roadmap for pricing policy reform for oil products. In light of events since 2009, it examines how recent price movements have affected countries' vulnerability to world oil price increases, how governments have adjusted domestic fuel prices in response, the consequences of the policy responses, other coping mechanisms to deal with high oil prices and price volatility, the roadblocks to reforming pricing policy, and how to deal with them. This report suggests a menu of options for moving away from sectoral subsidies to market-based pricing, accompanied by an integrated social protection program and complementary policies to reduce consumption through efficiency improvement and fuel diversification. Sending the right price signals and reducing consumption can bring many benefits, ranging from greater supply security to less congestion and pollution from road transport. This report can help policy makers conduct more informed national dialogues on managing fuel pricing and the political economy around it.