THE IMPACT OF CHANGES IN PRICES OF PETROLEUM PRODUCTS ON THE GENERAL PRICE LEVEL

Besim Aliti (), Marko MAarkic () and Boris Stulina ()
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Besim Aliti: (Kinesiology), BEGOC, Baku; Azerbaijan
Marko MAarkic: Oil AC Ltd., Bosnia and Herzegovina
Boris Stulina: Doctoral Candidate, Postgraduate Ph.D. study “Management”, Republic of Croatia

Interdisciplinary Management Research, 2015, vol. 11, 258-273

Abstract: Market is a complex mechanism; a regulator which, using the logic of competition and price, balances the supply and demand for products and services. In quantitative terms, the price is an expression of a seller’s willingness to trade goods or services for their cash equivalent, and at the same time a customer’s willingness to pay this amount of money in exchange for acceptable goods or services. The economic importance of the price of a product is not the same for all products. The prices of some products are more important for the functioning of the entire economy than the prices of other products. Such are the prices of crude oil and petroleum products because they have a strong and direct impact on the pricing of other products and services, because petroleum products are inputs in almost every manufacturing process. This paper attempts to establish the correlation between changes in the prices of oil and petroleum products and the prices of consumer goods. The main hypothesis is that an increase, or a decrease, in crude oil and petroleum product prices directly and automatically increases, or decreases, the prices of consumer goods. The paper explores the regularity and patterns that appear between changes in the prices of petroleum products and the prices of consumer goods in Bosnia and Herzegovina for the period from 2008 to 2014.

Keywords: general price level; correlation; regression; time series; prices of petroleum products. (search for similar items in EconPapers)
JEL-codes: E3 E31 R11 (search for similar items in EconPapers)
Date: 2015
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