Determinants of Russian Retail Petroleum Prices
We study the relationship between petroleum products consumer prices and the cost of their production (such as price of oil) in the Russian market. The hypothesis of the presence of asymmetry in the reaction of oil product prices in response to changes in world oil prices is tested. Point of equilibrium of supply and demand at the regional level is modelled. We also study the effect of spatial factors that reflect the peculiarities of the Russian market (the presence of vertically integrated companies and their interactions) on behavior of the petroleum products prices, as well as the effects of antitrust investigations. It is shown that supply factors of alternative sources (mini-refineries, imports, deliveries through pipelines, etc.) have a significant, albeit lesser effect on the Russian petroleum products retail prices along with the characteristics of VIC's (vertically integrated company) supply and costs. No clear evidence of the asymmetry of the reaction of oil product prices in response to changes in world oil prices was found. The reason appear to be related to the spatial inhomogeneity of the Russian petroleum products market.
Volume (Year): 30 (2016)
Issue (Month): 2 ()
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