Economics at your fingertips  

Do classes of gas stations contribute differently to fuel prices? Evidence to foster effective competition in Spain

Jacint Balaguer () and Jordi Ripollés ()

Energy Policy, 2020, vol. 139, issue C

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.

Keywords: Transportation fuel; Spain; Retail prices; Competition policy (search for similar items in EconPapers)
JEL-codes: L13 Q41 Q48 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.enpol.2020.111315

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-10-09
Handle: RePEc:eee:enepol:v:139:y:2020:i:c:s0301421520300732