Search Result

Srl

Item

ID: 176662

Do classes of gas stations contribute differently to fuel prices? evidence to foster effective competition in Spain / Balaguer, Jacint; Ripollés, Jordi

Balaguer, Jacint	Journal Article
	0 Rating(s) & 0 Review(s)

Summary/Abstract

Despite the relatively large number of gas stations reached in Spain after decades of sectorial reforms, pre-tax fuel prices in the country remain systematically among the highest in the EU. The literature provides evidence suggesting that a low intensity of competition in the retail distribution could contribute to these casual observations. With the purpose of shedding light on ways to design effective competition measures, we conduct an empirical analysis of more than ten million observations containing information about prices, brands, and locations at the station level. This allows us to know whether the exit (entry) of some classes of stations have the ability to reduce the prices of nearby competitors. Our results suggest that the presence in a local market of a station belonging to the network of the dominant market companies will tend to generate prices above the average. This is not only because these stations set higher prices but also because their presence will give rise to overpricing by local competitors. The opposite occurs with the self-advertised as “low-cost” stations. Policy measures promoting the gradual exit of stations associated with the dominant companies seem quite reasonable in view of the commitment to the transition toward transport decarbonization.

Key Words

Spain ; Competition Policy ; Transportation Fuel ; Retail Prices

In Basket

Export

ID: 180849

Do LPG prices react to the entry of natural gas? Implications for competition policy / González, Aldo; Lagos, Vicente

González, Aldo	Journal Article
	0 Rating(s) & 0 Review(s)

Summary/Abstract

In developing countries, the penetration of Liquefied Petroleum Gas (LPG) is still high, and hence the entry of Natural Gas (NG) networks coexists with the use of LPG by an important fraction of households. A relevant policy question is whether the degree of horizontal integration between NG and LPG providers has an influence on the level of retail prices. Using self-reported retail prices of the largest LPG provider in Chile during years 2013 and 2014, we estimate that the presence of a competing NG network generates an average decrease of LPG retail prices within the range [-4%,-2%]. This result suggests that the degree of horizontal integration between NG and LPG providers should matter, in particular for policy interventions such as merger control by competition authorities and the granting of concessions for deploying NG networks by sectoral regulators.

Key Words

Natural Gas ; Entry ; Retail Prices ; Liquefied Petroleum Gas ; Horizontal Integration

In Basket

Export