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Modelling the terminal gate prices of unleaded petrol in Australia

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  • Valadkhani, Abbas

Abstract

This paper examines whether or not unleaded petrol prices (at Australia's 18 wholesale distribution terminals) respond asymmetrically to changes in the exchange rate and the Singapore petrol prices (known as MOPS95). It is found that the exchange rate is the most significant source of asymmetric behaviour in 10 terminals. In other words, following a depreciation of $A, prices significantly rise more than when the exchange rate appreciates. The results indicate that terminal gate prices do not respond asymmetrically to changes in MOPS95 with the only 3 exceptions being Cairns, Devonport and Perth. There are also 8 terminals in which prices are significantly stickier downwards than upwards, suggesting that price increases are passed onto retailers faster than price decreases.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 33 (2013)
Issue (Month): C ()
Pages: 233-243

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Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:233-243

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Wholesale; Petrol prices; Australia; Asymmetric adjustment;

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Cited by:
  1. Balaguer, Jacint & Ripollés, Jordi, 2013. "Asymmetric fuel price responses under heterogeneity," MPRA Paper 52481, University Library of Munich, Germany.

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