Fuel price transmission mechanisms in Portugal

Abstract

This study aims to analyse the behaviour of fuel prices at the pump (unleaded gasoline and diesel) in Portugal, relative to positive and negative variations in Brent crude oil price. Applying an Autoregressive Distributed Lags (ARDL) model to weekly time series data for the period of January 2004 through May 2009, we detected some signs of asymmetry in the transmission price mechanism. However, these patterns are not statistically significant enough to reject hypotheses of symmetry in the price adjustment mechanisms of fuel in Portugal.

Keywords:

• fuel and oil prices
• price adjustment mechanisms

JEL Classification:

• Q41
• Q43