Journal of Petroleum & Environmental Biotechnology

Price transmission of changes in upstream prices to downstream prices in oil product markets: Evidence from China

International Conference and Expo on Oil and Gas

November 16-18, 2015 Dubai, UAE

Jian Yu, Guobin Huang and Peter Kelly

Renmin University of China, China

Posters-Accepted Abstracts: J Pet Environ Engineering

Abstract:

This paper examines three different price transmissions of changes in upstream oil product prices to downstream prices in China using semi monthly data on world crude oil prices and China�??s wholesale and retail prices from January 2009 to October 2013. The results suggest weak and positive asymmetry in the adjustment of China�??s gasoline wholesale and retail prices to cost changes. A positive asymmetry exists in the changes of wholesale prices of diesel in response to changes in world crude oil price, while there is a weak and negative asymmetry in the adjustment of retail prices of diesel fuel. When we identify and remove the impact of maximum retail prices on retail prices in China, there is a negative asymmetry in the adjustment of retail prices of gasoline and diesel. These findings have significant implications for the Chinese government in its marketoriented reform of refined oil pricing.

Biography :

Email: yujianjh@ruc.edu.cn