Determinants of Russian Retail Petroleum Prices

Andrey Kaukin, Evgeniya Filicheva and Lev Freinkman

Journal of the New Economic Association, 2016, vol. 30, issue 2, 34-59

Abstract: We study the relationship between petroleum products consumer prices and the cost of their production (such as price of oil) in the Russian market. The hypothesis of the presence of asymmetry in the reaction of oil product prices in response to changes in world oil prices is tested. Point of equilibrium of supply and demand at the regional level is modelled. We also study the effect of spatial factors that reflect the peculiarities of the Russian market (the presence of vertically integrated companies and their interactions) on behavior of the petroleum products prices, as well as the effects of antitrust investigations. It is shown that supply factors of alternative sources (mini-refineries, imports, deliveries through pipelines, etc.) have a significant, albeit lesser effect on the Russian petroleum products retail prices along with the characteristics of VIC's (vertically integrated company) supply and costs. No clear evidence of the asymmetry of the reaction of oil product prices in response to changes in world oil prices was found. The reason appear to be related to the spatial inhomogeneity of the Russian petroleum products market.

Keywords: petroleum products; the asymmetry of the reaction in prices; oligopoly; the price of oil; FAS; vertically integrated oil companies; refineries (search for similar items in EconPapers)
JEL-codes: D43 L13 L71 Q41 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.econorus.org/repec/journl/2016-30-34-59r.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:nea:journl:y:2016:i:30:p:34-59

Access Statistics for this article

Journal of the New Economic Association is currently edited by Victor Polterovich and Aleksandr Rubinshtein

More articles in Journal of the New Economic Association from New Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Alexey Tcharykov ().