IMRS experts study the effect of global oil price on gasoline price in Uzbekistan

In the analysis, in the period from January 2022 to November 2023, the wholesale prices of gasoline sold at the Republican Commodity Exchange, retail gasoline prices in the city of Tashkent and oil prices of the World Bank were used.

According to the results of the analysis, the change in the price of oil in the world market is reflected in the prices of gasoline at the Republican Commodity Exchange after 1 month.

For example, a 39.2% increase in oil prices in January-June 2022 led to a 22.4% increase in the average wholesale price of gasoline on the exchange. In July-December 2022, the 33.2% drop in oil prices on the world market caused wholesale prices to drop by 21.3% on average.

As a result of the stabilization of oil prices on the world market in January-May 2023 and the reduction of the excise tax for Ai-80 gasoline to zero from December 10, 2022, the average wholesale price of gasoline was formed in the range of 4,848-5,060 soums.

However, in June-November 2023, the average wholesale price of gasoline increased from 5,315 to 5,860 soums (10.2%). During this period, the average price of oil in the world market increased by 11% (from $73 to $81).

According to the results of the econometric analysis, it was found that the average wholesale price of gasoline, including the wholesale prices of high-demand Ai-80 and Ai-92 gasoline, is sensitive to the price of oil in the world market. In particular, a 1% increase in the price of oil on the world market led to a 0.30% increase in the average wholesale price of gasoline with a delay of one month, including an increase in the price of Ai-80 gasoline by 0.32% and Ai-92 gasoline by 0.54%.

“The average retail prices of gasoline in Tashkent are sensitive to the average wholesale prices, and they have the same dynamics of change. In particular, a 1% increase in the wholesale price of gasoline at the Republican Commodity Exchange leads to a 0.29% increase in retail prices in the city of Tashkent,” the report reads.

But despite the fact that in November 2023, the price of 1 barrel of oil on the world market decreased to $81.35 on average (by 8.7% compared to October), the average retail price of Ai-80 gasoline in Tashkent in December (7,611 soums) compared to November (7,440 soums) increased by 2.3%.

This can be explained by a significant increase in the demand for Ai-80 gasoline as a result of restrictions on the supply of methane gas with the onset of cold weather in mid-December.

“Due to the fact that part of the demand for oil and gasoline products in our country is covered by imports, the change in oil prices in the world market significantly affects the prices of gasoline in the domestic market. So, gasoline prices in Uzbekistan move in harmony with oil prices in the world market with a 1-month lag,” experts noted.