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The relative effects of crude oil price and exchange rate on petroleum product prices: Evidence from a set of Northern Mediterranean countries

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  • Berument, M. Hakan
  • Sahin, Afsin
  • Sahin, Serkan

Abstract

This paper provides a set of empirical evidence from five Northern Mediterranean countries that are subject to similar refinery reference prices regarding the relative sensitivity of crude oil prices and exchange rate on (pre-tax) petroleum product prices. The empirical evidence reveals that a one percent increase in exchange rate (depreciation) increases petroleum product prices less than a one percent increase in crude oil prices does in the long run. In the short run, however, a one percent increase in exchange rate increases petroleum product prices more than a one percent increase in crude oil prices does.

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  • Berument, M. Hakan & Sahin, Afsin & Sahin, Serkan, 2014. "The relative effects of crude oil price and exchange rate on petroleum product prices: Evidence from a set of Northern Mediterranean countries," Economic Modelling, Elsevier, vol. 42(C), pages 243-249.
  • Handle: RePEc:eee:ecmode:v:42:y:2014:i:c:p:243-249
    DOI: 10.1016/j.econmod.2014.07.019
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    4. Pal, Debdatta & Mitra, Subrata Kumar, 2015. "Asymmetric impact of crude price on oil product pricing in the United States: An application of multiple threshold nonlinear autoregressive distributed lag model," Economic Modelling, Elsevier, vol. 51(C), pages 436-443.
    5. Radmila Krkošková, . "Relationship between the Brent Oil Price and the US Dollar Exchange Rate," Prague Economic Papers, University of Economics, Prague, vol. 0, pages 1-17.
    6. Mouna Aloui & Jarboui Anis, 2023. "The Dynamic Relation between the Oil Price Volatility, Stock Market, Exchange and Interest Rate in GCC Countries: Panel Vector Autoregressive (PVAR) Model," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 114-128.
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    9. Baneng Naape & Ndzalama C. Mathebula, 2022. "How do petrol prices respond to variations in crude oil and the exchange rate? Evidence from South Africa," Journal of New Economy, Ural State University of Economics, vol. 23(3), pages 23-42, October.
    10. Alqahtani, Faisal & Samargandi, Nahla & Kutan, Ali M., 2020. "The influence of oil prices on the banking sector in oil-exporting economies: Is there a psychological barrier?," International Review of Financial Analysis, Elsevier, vol. 69(C).
    11. Radmila Krkošková, 2020. "Relationship Between the Brent Oil Price and the US Dollar Exchange Rate," Prague Economic Papers, Prague University of Economics and Business, vol. 2020(2), pages 187-206.
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