Economics at your fingertips  

Retail and wholesale gasoline price adjustments in response to oil price changes

Donald Bumpass (), Vance Ginn and M.H. Tuttle

Energy Economics, 2015, vol. 52, issue PA, 49-54

Abstract: This research examines the long-run relationship between the spot oil price and retail and wholesale gasoline prices. Recent research suggests that the response of the retail gasoline price is faster and the size of the change is larger, in magnitude, following a crude oil price increase compared with periods when the crude oil price is falling; however, some recent papers examining potential asymmetries present mixed results. Our results from a common threshold model estimating the adjustment of gasoline prices and the spot oil price suggest a long-run relationship between retail and wholesale gasoline prices and the crude oil price. Further, results here suggest that both retail and wholesale gasoline prices respond symmetrically to an oil price shock in the long run, indicating little market power by gas stations and wholesalers.

Keywords: Retail gasoline price; Wholesale gasoline price; Oil price; Cointegration; Threshold models; Asymmetric price adjustment (search for similar items in EconPapers)
JEL-codes: C32 D40 Q40 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-03-31
Handle: RePEc:eee:eneeco:v:52:y:2015:i:pa:p:49-54