Crude Oil and Gasoline Prices in Fiji: Is the Relationship Asymmetric?

This paper tests and confirms asymmetry in the Fiji gasoline price adjustment equations with respect to changes in the crude oil prices. More satisfactory specifications and estimation are used than in the earlier studies. It is found that two alternative approaches viz., the Granger two-step and the LSE-Hendry general to specific approaches, give similar results. Our results show that oil firms in Fiji seem to adjust gasoline prices twice faster than decrease them.