How did the 2021-2022 energy shock impact the prices of transport services for consumers across EU countries?

Abstract

This paper analyses the spillover effects oil price movements to consumer prices of transportation services in 27 EU countries, employing fixed-effects panel data estimation on the period from 2020 to 2023. This is the period of a sudden surge in global crude oil prices driven primarily by supply bottlenecks and the conflict in Ukraine. We analyze spillover effects on transport services prices as an aggregate, and separately for different modes of passenger transport, which include air passenger transport, sea and waterway passenger transport and railway passenger transport. We find that the effect of crude oil price on the Harmonized Index of Consumer Prices (HICP) of transport services is positive and statistically significant at 5% level. However, the effect of crude oil price on HICP of transport services varies across countries and different modes of passenger transport. The effect of crude oil price increase is less pronounced for road transport than for air and sea and waterway passenger transport, while the highest effect is estimated for air passenger transport. In contrast, recent oil price shock did not have a statistically significant effect on HICP of passenger railway transport. Overall, recent oil price shock had a limited impact on consumer prices of transport services in the EU. This can be mainly attributed to the implementation of targeted policy measures across the EU aimed at mitigating the inflationary effects of the global energy crisis.