Why do petrol prices fall slower than they rise?
This phenomenon is known as “rocket and feathers”, analysts said: prices shoot up quickly when crude oil rises, but drift down slowly when it falls.
When crude prices rise sharply, higher wholesale costs feed through relatively quickly as retailers replenish inventories at higher prices, said Ms Sheana Yue, senior economist at Oxford Economics.
Shortly after the conflict broke out, supply chain disruptions pushed Brent crude to a high of US$119.40 per barrel on Mar 9. Petrol prices followed closely, increasing by as much as S$0.40 a litre in under a week, with some grades crossing S$4 a litre for the first time in years.
By contrast, when crude prices fall, retailers typically wait to see whether the decline is sustained before lowering pump prices, causing prices to fall slowly, Ms Yue said.
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