MUMBAI : Rising fuel prices have long been one of the easiest ways for opposition parties to target the government. Expensive petrol and diesel hit the common household hard, and only help the opposition make its point.
As a World Bank study suggests, voters also tend to act on a rise or decline in the price of fuel. Oil price movements are politically significant as they have the power to displace governments.
Using polling data from 207 elections across 50 democracies over the past 40 years, the working paper shows that sudden increases in oil prices a year before an election significantly reduce the chances of the incumbent party retaining power. Specifically, the study finds that a 0.1% increase in crude oil prices, adjusted for each country’s oil imports as a share of gross domestic product (GDP), reduces the re-election chance of the ruling party by 0.5-0.8 percentage points.
