Asymmetries in the adjustment of motor diesel and gasoline pump prices in Europe
Gasoline prices are said to take longer to decrease and at a slower rate when crude oil prices fall than they do to increase when crude oil prices rise. In this paper I analyze to what extent this asymmetry phenomenon can be identified across all EU15 Member States, plus the EU15 average, and I allow for a comparative analysis between IO95 gasoline and motor diesel. I follow previous approaches by disentangling between the two major channels of pump price formation in Europe, namely the international channel from Brent to Platts (ex-refinery) prices and the domestic channels from Platts to average pump prices before tax. I consider weekly data over the period 2004-2008 and follow a previously proposed co-integration based econometric approach. Results strongly suggest the existence of asymmetries in the international channel for diesel, where there is also evidence of overshooting, but not for gasoline. On the domestic channels, the evidence in favour of asymmetries depends on the considered Member State and type of fuel.
|Date of creation:||Jul 2009|
|Contact details of provider:|| Postal: Rua laura Alves, no.4 7o, 1050-138 Lisboa|
Phone: (351) 21 790 20 00
Fax: (351) 21 790 20 99
Web page: http://www.autoridadedaconcorrencia.pt/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:pca:wpaper:37. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Duarte Brito)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.