Do Retail Petrol Prices Rise More Rapidly Than They Fall in Australia’s Capital Cities?

Abbas Valadkhani

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: This paper examines the long-run and short-run determinants of unleaded petrol prices in Australia’s capital cities using monthly data to test whether prices respond asymmetrically to external shocks. In the long-run petrol prices are mainly determined by the Tapis crude oil and Singapore petrol prices. There is some evidence of asymmetric price adjustments in the short-run since petrol price increases have been mostly passed on to the consumer faster than price decreases in four capital cities. One can thus argue that there are a significant degree of market inefficiency and/or collusion, requiring closer government price monitoring and scrutiny.

Keywords: Petrol prices; Asymmetric effects; Australia. (search for similar items in EconPapers)
JEL-codes: C22 E31 L11 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009
New Economics Papers: this item is included in nep-com, nep-ene, nep-sea and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:uow:depec1:wp09-08

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