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The relative effects of crude oil price and exchange rate on petroleum product prices: Evidence from a set of Northern Mediterranean countries

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  • Berument, M. Hakan
  • Sahin, Afsin
  • Sahin, Serkan

Abstract

This paper provides a set of empirical evidence from five Northern Mediterranean countries that are subject to similar refinery reference prices regarding the relative sensitivity of crude oil prices and exchange rate on (pre-tax) petroleum product prices. The empirical evidence reveals that a one percent increase in exchange rate (depreciation) increases petroleum product prices less than a one percent increase in crude oil prices does in the long run. In the short run, however, a one percent increase in exchange rate increases petroleum product prices more than a one percent increase in crude oil prices does.

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  • Berument, M. Hakan & Sahin, Afsin & Sahin, Serkan, 2014. "The relative effects of crude oil price and exchange rate on petroleum product prices: Evidence from a set of Northern Mediterranean countries," Economic Modelling, Elsevier, vol. 42(C), pages 243-249.
    • Handle: RePEc:eee:ecmode:v:42:y:2014:i:c:p:243-249
    DOI: 10.1016/j.econmod.2014.07.019
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