Modelling the Price of Unleaded Petrol in Australia’s Capital Cities

Abbas Valadkhani

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the long-run and short-run determinants of unleaded petrol price in Australia’s capital cities using monthly data to find out whether prices respond asymmetrically to external shocks. In the long-run petrol prices are mainly determined by 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 a closer government price monitoring and scrutiny.

Keywords: Petrol prices; Asymmetry; Australia (search for similar items in EconPapers)
JEL-codes: C2 L9 L91 L98 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (8)

Published in Australasian Accounting Business and Finance Journal 2.4(2010): pp. 19-38

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:50396

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