Relation of Retail Gasoline and Diesel Prices in Croatia with Crude Oil Prices on World Markets

Authors

DOI:

https://doi.org/10.54820/entrenova-2023-0005

Keywords:

asymmetry, retail gasoline prices, error correction model, threshold autoregressive cointegration, linear-exponential adjustment cost function, generalised method of moments, Croatia

Abstract

According to many studies, the transmission of oil prices to retail fuel prices is asymmetric. Fuel prices react faster if oil prices rise and more slowly if oil prices fall. We use the simple and dynamic asymmetry models, error correction models, threshold autoregressive cointegration, and an approach based on the adjustment cost function in the linear-exponential form to verify the hypothesis of asymmetric reactions of gasoline and diesel prices in Croatia. The analysis uses a weekly time series of Croatian fuel prices obtained from the European Commission Weekly Oil Bulletin and BRENT oil prices from the US Energy Information Administration. Different standard econometric procedures lead to different results. Nevertheless, the approach based on the linear-exponential lost function confirmed the price asymmetries in the Croatian market.

Author Biographies

Karol Szomolányi, University of Economics in Bratislava, Slovakia

Karol Szomolányi was born in Bojnice in the Slovak Republic (formerly Czechoslovakia) in 1976. He is an associated operations research and econometrics professor at the University of Economics in Bratislava, Faculty of Economic Informatics, Department of Operations Research and Econometrics. He is a member of the Slovak Society for Operations Research. He deals with macroeconomic analysis and econometrics. His areas of interest are accurate business cycle models and dynamic stochastic macroeconomic models and their use for developing countries of Eastern Europe. The author can be contacted at karol.szomolanyi@euba.sk.

Martin Lukáčik, University of Economics in Bratislava, Slovakia

Martin Lukáčik was born in Žilina in the Slovak Republic (formerly Czechoslovakia) in 1974. He is an associated operations research and econometrics professor at the University of Economics in Bratislava, Faculty of Economic Informatics, Department of Operations Research and Econometrics. He is a president of the Slovak Society for Operations Research. He deals with the econometric methods in macroeconomic framework and time series econometrics. His areas of interest are VAR models used in macroeconomics and forecasting methods. The author can be contacted at martin.lukacik@euba.sk

Adriana Lukáčiková, University of Economics in Bratislava, Slovakia

Adriana Lukáčiková was born in Gelnica in the Slovak Republic (formerly Czechoslovakia) in 1971. She is an assistant professor of operations research and econometrics at the University of Economics in Bratislava, Faculty of Economic Informatics, Department of Operations Research and Econometrics. She is a member of the Slovak Society for Operations Research. She deals with the computable general equilibrium models and econometrics. Her area of interest is the econometric modelling of the national economy. The author can be contacted at adriana.lukacikova@euba.sk

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Published

2024-08-26

How to Cite

Szomolányi, K., Lukáčik, M., & Lukáčiková, A. . (2024). Relation of Retail Gasoline and Diesel Prices in Croatia with Crude Oil Prices on World Markets. ENTRENOVA - ENTerprise REsearch InNOVAtion, 9(1), 51–59. https://doi.org/10.54820/entrenova-2023-0005

Issue

Vol. 9 No. 1 (2023)

Section

Mathematical and Quantitative Methods

License

Copyright (c) 2024 Karol Szomolányi, Martin Lukáčik, Adriana Lukáčiková

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.