The Effect of Stock, Government Policy, and Monopoly on Asymmetric Price Transmission in Thailand

Phaisan Pattanakooha and Pongsa Pornchaiwisetgul
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Phaisan Pattanakooha: Chulalongkorn University, Bangkok, Thailand.
Pongsa Pornchaiwisetgul: Chulalongkorn University, Bangkok, Thailand.

International Journal of Energy Economics and Policy, 2015, vol. 5, issue 4, 926-933

Abstract: The article studies of asymmetric price transmission (APT) of gasoline price and diesel price and their causes in Thailand. The study employs the monthly data of West Texas Instrument crude oil price, unleaded gasoline (ULG) price and high speed diesel (HSD) price, the oil fund, the stock of ULG and HSD inventories. The results show that APT exists for ULG but not for HSD. The oil fund does not influence on the price asymmetry. Whether the oil fund is levied, the price asymmetry always presents for ULG but not for HSD. Moreover, the marketing margins or firms profits do not cause the asymmetric price for both. However, the oil fund and the marketing margins could make ULG prices adjust more quickly but HSD more slowly. The government is successful to use the oil fund directly to regulate the market gasoline and diesel price. The firms monopoly power could also indirectly maintain those prices stable and make ULG price adjust more slowly and HSD more quickly. Finally, the stocks of ULG and HSD do not have the effects on the price asymmetry. The asymmetry is influenced mainly by the oil fund and the marketing margins. Firms do not need to adjust their price and their quantity.

Keywords: Asymmetric Price Transmission; Oil Fund; Marketing Margins; Stock of Inventories (search for similar items in EconPapers)
JEL-codes: C32 Q41 Q48 (search for similar items in EconPapers)
Date: 2015
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