The Turkish downstream petroleum industry : Analysis of market efficiency

Abstract

The process of liberalization is shaping the policies of governments regarding the key sectors such as energy. Turkey has also gone through these processes and the current downstream petroleum market is considered to be liberal with one private refinery and many players in petroleum products retail market. In this paper, pricing mechanisms and market structure in the Turkish downstream petroleum industry will be investigated in detail focusing on the period between 2007 and 2009. In order to conduct such analysis, market efficiency will be analyzed in detail by applying econometric tools to test for asymmetric price patterns if there exists between crude oil prices and fuel prices in Turkey. The aim of this paper is to draw a general picture of the current market as well as looking at the market developments and analyzing the pricing mechanisms in the sector via taking into account the margins and pricing behaviors of players by applying different methodologies combining with comparative analysis.