 Retail fuel price adjustment in Germany: A threshold cointegration approachEmmanuel Asane-Otoo and Jan Schneider () Energy Policy, 2015, vol. 78, issue C, 1-10 Abstract: Consumers in Germany often complain that retail fuel prices usually adjust quickly to crude oil price increases than decreases and characterize this pricing pattern as market power exploitation. In this paper, we use both weekly national and daily city-specific (Berlin, Hamburg, Munich and Cologne) data to investigate the extent to which retail fuel prices in Germany adjust to changes in the international crude oil price. At the national level with weekly prices, we find positive asymmetries for both gasoline and diesel within the period 2003–2007, reflecting that retail prices react more swiftly to crude oil price increases than decreases. In contrast, for 2009–2013, we observe symmetric adjustment and negative asymmetry for retail diesel and gasoline prices, respectively. The city level analysis supports our findings in the latter time period. Thus, regulatory measures aimed at the retail fuel market over recent years seem to have been effective, and, contrary to consumers' perception, we find no evidence for excessive market power or collusion. Keywords: Asymmetry; Error correction models; Threshold cointegration; Retail fuel price (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:78:y:2015:i:c:p:1-10 DOI: 10.1016/j.enpol.2014.12.013 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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