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Asymmetries in the adjustment of motor diesel and gasoline pump prices in Europe


  • Jorge Rodrigues

    () (Autoridade da Concorrência)


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.

Suggested Citation

  • Jorge Rodrigues, 2009. "Asymmetries in the adjustment of motor diesel and gasoline pump prices in Europe," Working Papers 37, Portuguese Competition Authority.
  • Handle: RePEc:pca:wpaper:37

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    References listed on IDEAS

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    6. Gans, Joshua S, 2001. "Regulating Private Infrastructure Investment: Optimal Pricing for Access to Essential Facilities," Journal of Regulatory Economics, Springer, vol. 20(2), pages 167-189, September.
    7. Kotakorpi, Kaisa, 2006. "Access price regulation, investment and entry in telecommunications," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 1013-1020, September.
    8. Guthrie, Graeme, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Working Paper Series 3851, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
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