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The Relationship Between Liquefied Petroleum Gas and Crude Oil Prices: A Case Study of the Polish Fuel Market

Author

Listed:
  • Łukasz Mamica
  • Kamil Makieła
  • Renata Wróbel-Rotter
  • Monika Mazur-Bubak
  • Jakub Głowacki
  • Michał Król
  • Paweł Bajołek

Abstract

This study investigates the interdependence between LPG and crude oil prices by leveraging the Seasonal Auto-Regressive Integrated Moving Average time series model with exogenous variables (SARIMAX model). Three scenarios are considered, incorporating price indices for the Western Index, Eastern Index, and Total Index, which is calculated as a weighted average of the two preceding indices. The study focuses on Poland, which, during the analysed period, was heavily dependent on energy resource supplies from Russia. The findings of the econometric analysis show that: (1) there is a strong and statistically significant association between changes in oil prices and changes in gas prices for imports to Poland regardless of their source; (2) this relationship is strongest for the Western Index; (3) weekly LPG price changes adjusted for the relationship between oil and LPG prices do not exhibit a particularly long memory or seasonality; and (4) the Eastern Index is characterised by a fairly high elasticity with respect to the past (short-term) dynamics of current LPG prices. Thus, the conflict in Ukraine and the resulting decline in LPG imports from Russia are unlikely to result in long-term market instability in Poland.

Suggested Citation

  • Łukasz Mamica & Kamil Makieła & Renata Wróbel-Rotter & Monika Mazur-Bubak & Jakub Głowacki & Michał Król & Paweł Bajołek, 2026. "The Relationship Between Liquefied Petroleum Gas and Crude Oil Prices: A Case Study of the Polish Fuel Market," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 23-38.
    • Handle: RePEc:sgh:gosnar:y:2026:i:1:p:23-38
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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