The Effect of Oil Prices Volatility on Prices in The Domestic Market: Empirical Evidence From Russia | ICRES

Paper Detail

Title

The Effect of Oil Prices Volatility on Prices in The Domestic Market: Empirical Evidence From Russia

Authors

Assoc. Prof. Dr. Svetlana Balashova, Rudn University, Russia

Abstract

The dynamics of real prices for crude oil in the domestic market and its dependence on world oil prices is examined. The examined period is 2000- 2020. Rosstat monthly data on oil prices for domestic companies are used. The real prices of oil are obtained by deflating the average purchase prices of crude oil for domestic companies by the CPI. Prices for Brent are utilized as an indicator of world prices for oil, data are retrieved from IEA. The ARDL model estimates show that real domestic oil prices depend on Brent prices and on the volatility of Brent prices. To measure the volatility of Brent prices we utilize the moving standard deviation over a one-year rolling window. Before building the model, checks for unit roots are made. Results. Nominal prices in dollars are strongly related to current word prices although are considerably lower in the domestic market. The difference between the world market price and the local price is mainly export duties. Export duties on oil and petroleum products, in addition to their fiscal function, also perform the function of protecting the domestic market from rising fuel prices. However, the real oil price in the local currency has different dynamics and is less volatile than current dollars prices. Volatility in Brent prices has an additional impact on real domestic prices for crude oil in Russia. Uncertainty in the global oil market causes the uncertainty in revenue flow for the oil-producing companies, which forces them to increase oil prices in the domestic market. Domestic prices dropped sharply in April 2020, but then almost return to pre-pandemic levels although Brent has not. the possible explanation is the increased volatility in the global oil market.

 Keywords

real prices for crude oil, volatility, uncertainty, Russia  

Citation

Balashova, S. (2021). The Effect of Oil Prices Volatility on Prices in The Domestic Market: Empirical Evidence From Russia. In M. Shelley, I. Chiang, & O. T. Ozturk (Eds.), Proceedings of ICRES 2021--International Conference on Research in Education and Science (pp. 108-118). Monument, CO, USA: ISTES Organization. Retrieved 26 October 2021 from www.2021.icres.net/proceedings/73/.

Links

Download Fulltext
Announcements

Publication in Scopus, Web of Science, ERIC and Copericus Indexed Journals

After the peer-reviewing process, the selected full papers will be published in the following  Scopus, Web of Science, ERIC and Copernicus Indexed Journals:  International Journal of Education in Mathematics, Science and Technology (IJEMST): ...

September 01, 2020

View details »

Web of Science - Conference Proceedings Citation Index (CPCI) & ERIC Index

We are happy to announce that the Proceedings of International Conference on Social and Education Sciences (IConSES)-2019 is selected by Web of Science for coverage in the Conference Proceedings Citation Index (CPCI). The Proceedings of Internation...

September 01, 2020

View details »

Annual Books

The Studies on Social and Education Sciences (SonSES) is a peer-reviewed scholarly online book. The invited papers are reviewed by at least two international reviewers with expertise in the relevant subject area. The book is a refereed book and has a double-blind review.   It is publi...

August 28, 2020

View details »

Supported by
IOWA
EVMS
National Taiwan Normal University
Leiden University
International Society for Technology, Education and Science
Istek Schools
Participating Countries ICRES 2021

Note: The conference presenters were from 14 different countries at the ICRES 2020. While 44% of the presenters were from Turkey, 56% of the presenters were from other countries.
Please click here for information about ICRES participation in 2020.

Abstracting/Indexing

The publications affiliated with ISTES Organization are indexed or listed by all or some of the following sources:

Sponsors