Do retail gasoline prices adjust symmetrically to crude oil price changes? the case of the Greek oil market

The present paper investigates whether Greek gasoline prices respond symmetrically to changes in international oil prices. The study uses all available observations and applies the TAR (Threshold Auto-Regressive) methodology, which is considered to be the most reliable econometric technique based on statistical criteria. The adjustment of domestic retail gasoline prices to international oil price changes turns out to be asymmetric. This finding shows that the suppliers of gasoline tend to reduce their retail prices slowly when international oil prices fall, but increase them faster when international oil prices rise. The above result indicates lack of competitive conditions in the market under consideration.