Modelling the terminal gate prices of unleaded petrol in Australia

Abbas Valadkhani

Economic Modelling, 2013, vol. 33, issue C, 233-243

Abstract: This paper examines whether or not unleaded petrol prices (at Australia's 18 wholesale distribution terminals) respond asymmetrically to changes in the exchange rate and the Singapore petrol prices (known as MOPS95). It is found that the exchange rate is the most significant source of asymmetric behaviour in 10 terminals. In other words, following a depreciation of $A, prices significantly rise more than when the exchange rate appreciates. The results indicate that terminal gate prices do not respond asymmetrically to changes in MOPS95 with the only 3 exceptions being Cairns, Devonport and Perth. There are also 8 terminals in which prices are significantly stickier downwards than upwards, suggesting that price increases are passed onto retailers faster than price decreases.

Keywords: Wholesale; Petrol prices; Australia; Asymmetric adjustment (search for similar items in EconPapers)
JEL-codes: C22 D40 L81 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:33:y:2013:i:c:p:233-243

DOI: 10.1016/j.econmod.2013.04.012

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