IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-15-00113.html
   My bibliography  Save this article

Rent seeking oligopolistic behaviour in European gasoline markets

Author

Listed:
  • Michael L Polemis

    (University of Piraeus)

  • Panagiotis N Fotis

    (Hellenic Competition Commission)

Abstract

This paper explores the asymmetric adjustment speed of gasoline price in twelve European Union (EU) countries transmitted directly in a single stage formulation. The empirical results shed new light on the taxation effect and its role to the price asymmetry nexus, pointing that in many EU countries a crude oil price increase is passed through more forcefully than a price decrease revealing a rent-seeking oligopolistic behaviour by the marketers.

Suggested Citation

  • Michael L Polemis & Panagiotis N Fotis, 2015. "Rent seeking oligopolistic behaviour in European gasoline markets," Economics Bulletin, AccessEcon, vol. 35(1), pages 827-833.
    • Handle: RePEc:ebl:ecbull:eb-15-00113
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I1-P85.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Polemis, Michael L. & Fotis, Panagiotis N., 2014. "The taxation effect on gasoline price asymmetry nexus: Evidence from both sides of the Atlantic," Energy Policy, Elsevier, vol. 73(C), pages 225-233.
    2. Greenwood-Nimmo, Matthew & Shin, Yongcheol, 2013. "Taxation and the asymmetric adjustment of selected retail energy prices in the UK," Economics Letters, Elsevier, vol. 121(3), pages 411-416.
    3. Severin Borenstein, 1991. "Selling Costs and Switching Costs: Explaining Retail Gasoline Margins," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 354-369, Autumn.
    4. Bachmeier, Lance, 2013. "Identification in models of gasoline pricing," Economics Letters, Elsevier, vol. 120(1), pages 71-73.
    5. Juan Jiménez & Jordi Perdiguero, 2012. "Does Rigidity of Prices Hide Collusion?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 41(3), pages 223-248, November.
    6. Olivier Lamotte & Thomas Porcher & Christophe Schalck & Stephan Silvestre, 2013. "Asymmetric gasoline price responses in France," Applied Economics Letters, Taylor & Francis Journals, vol. 20(5), pages 457-461, March.
    7. Ronald Johnson, 2002. "Search Costs, Lags and Prices at the Pump," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(1), pages 33-50, February.
    8. Bacon, Robert W., 1991. "Rockets and feathers: the asymmetric speed of adjustment of UK retail gasoline prices to cost changes," Energy Economics, Elsevier, vol. 13(3), pages 211-218, July.
    9. Radchenko, Stanislav, 2005. "Oil price volatility and the asymmetric response of gasoline prices to oil price increases and decreases," Energy Economics, Elsevier, vol. 27(5), pages 708-730, September.
    10. Giliola Frey & Matteo Manera, 2007. "Econometric Models Of Asymmetric Price Transmission," Journal of Economic Surveys, Wiley Blackwell, vol. 21(2), pages 349-415, April.
    11. Michael Polemis, 2012. "Competition and price asymmetries in the Greek oil sector: an empirical analysis on gasoline market," Empirical Economics, Springer, vol. 43(2), pages 789-817, October.
    12. Polemis, Michael L. & Fotis, Panagiotis N., 2013. "Do gasoline prices respond asymmetrically in the euro zone area? Evidence from cointegrated panel data analysis," Energy Policy, Elsevier, vol. 56(C), pages 425-433.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Polemis, Michael L. & Tsionas, Mike G., 2016. "An alternative semiparametric approach to the modelling of asymmetric gasoline price adjustment," Energy Economics, Elsevier, vol. 56(C), pages 384-388.
    2. Alberto Bagnai & Christian Alexander Mongeau Ospina, 2016. "Price asymmetries in the European gasoline market," a/ Working Papers Series 1602, Italian Association for the Study of Economic Asymmetries, Rome (Italy).
    3. Jonathan E. Ogbuabor & Anthony Orji & Gladys C. Aneke & Manasseh O. Charles, 2019. "Did the global financial crisis alter the oil–gasoline price relationship?," Empirical Economics, Springer, vol. 57(4), pages 1171-1200, October.
    4. Jonathan E. Ogbuabor & God'stime O. Eigbiremolen & Charles O. Manasseh & Ifeoma C. Mba, 2018. "Asymmetric Price Transmission and Rent‐seeking in Road Fuel Markets: A Comparative Study of South Africa and Selected Eurozone Countries," African Development Review, African Development Bank, vol. 30(3), pages 278-290, September.
    5. Ogbuabor, Jonathan E. & Ukwueze, Ezebuilo R. & Mba, Ifeoma C. & Ojonta, Obed I. & Orji, Anthony, 2023. "The asymmetric impact of economic policy uncertainty on global retail energy markets: Are the markets responding to the fear of the unknown?," Applied Energy, Elsevier, vol. 334(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sylwester Bejger, 2021. "Competition in a Wholesale Fuel Market—The Impact of the Structural Changes Caused by COVID-19," Energies, MDPI, vol. 14(14), pages 1-26, July.
    2. Chen, Chaoyi & Polemis, Michael & Stengos, Thanasis, 2018. "On the Examination of Competition in the Petroleum Industry: A Pooled Panel Threshold Analysis," MPRA Paper 89671, University Library of Munich, Germany.
    3. Jonathan E. Ogbuabor & Anthony Orji & Gladys C. Aneke & Manasseh O. Charles, 2019. "Did the global financial crisis alter the oil–gasoline price relationship?," Empirical Economics, Springer, vol. 57(4), pages 1171-1200, October.
    4. Jordi Perdiguero-García, 2010. "“Symmetric or asymmetric gasoline prices? A metaanalysis approach”," IREA Working Papers 201013, University of Barcelona, Research Institute of Applied Economics, revised Nov 2010.
    5. Chen, Chaoyi & Polemis, Michael & Stengos, Thanasis, 2019. "Can exchange rate pass-through explain the asymmetric gasoline puzzle? Evidence from a pooled panel threshold analysis of the EU," Energy Economics, Elsevier, vol. 81(C), pages 1-12.
    6. Sylwester Bejger, 2019. "Wholesale fuel price adjustment in Poland: examination of competi-tive performance," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 18(4), pages 385-412, December.
    7. Michael Polemis, 2012. "Competition and price asymmetries in the Greek oil sector: an empirical analysis on gasoline market," Empirical Economics, Springer, vol. 43(2), pages 789-817, October.
    8. Deltas, George & Polemis, Michael, 2020. "Estimating retail gasoline price dynamics: The effects of sample characteristics and research design," Energy Economics, Elsevier, vol. 92(C).
    9. Polemis, Michail & Fotis, Panagiotis, 2011. "The gasoline Industry in European Union and the USA," MPRA Paper 35097, University Library of Munich, Germany.
    10. Polemis, Michael L. & Fotis, Panagiotis N., 2014. "The taxation effect on gasoline price asymmetry nexus: Evidence from both sides of the Atlantic," Energy Policy, Elsevier, vol. 73(C), pages 225-233.
    11. Pradeep, Siddhartha, 2022. "Impact of diesel price reforms on asymmetricity of oil price pass-through to inflation: Indian perspective," The Journal of Economic Asymmetries, Elsevier, vol. 26(C).
    12. Chen, Hao & Sun, Zesheng, 2021. "International crude oil price, regulation and asymmetric response of China's gasoline price," Energy Economics, Elsevier, vol. 94(C).
    13. Ederington, Louis H. & Fernando, Chitru S. & Hoelscher, Seth A. & Lee, Thomas K. & Linn, Scott C., 2019. "A review of the evidence on the relation between crude oil prices and petroleum product prices," Journal of Commodity Markets, Elsevier, vol. 13(C), pages 1-15.
    14. Katarzyna Leszkiewicz-Kędzior & Aleksander Welfe, 2014. "Asymmetric Price Adjustments in the Fuel Market," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 6(2), pages 105-127, June.
    15. Malkidis, Stavros & Fountas, Stilianos, 2020. "Liquid fuel price adjustment in Greece: A two-stage, threshold cointegration approach," The Journal of Economic Asymmetries, Elsevier, vol. 22(C).
    16. Bagnai, Alberto & Mongeau Ospina, Christian Alexander, 2015. "Long- and short-run price asymmetries and hysteresis in the Italian gasoline market," Energy Policy, Elsevier, vol. 78(C), pages 41-50.
    17. Bragoudakis, Zacharias & Degiannakis, Stavros & Filis, George, 2020. "Oil and pump prices: Testing their asymmetric relationship in a robust way," Energy Economics, Elsevier, vol. 88(C).
    18. Pal, Debdatta & Mitra, Subrata K., 2016. "Asymmetric oil product pricing in India: Evidence from a multiple threshold nonlinear ARDL model," Economic Modelling, Elsevier, vol. 59(C), pages 314-328.
    19. Utku Özmen, Mustafa & Akçelik, Fatih, 2017. "Asymmetric exchange rate and oil price pass-through in motor fuel market: A microeconometric approach," The Journal of Economic Asymmetries, Elsevier, vol. 15(C), pages 64-75.
    20. Radchenko, Stanislav & Shapiro, Dmitry, 2011. "Anticipated and unanticipated effects of crude oil prices and gasoline inventory changes on gasoline prices," Energy Economics, Elsevier, vol. 33(5), pages 758-769, September.

    More about this item

    Keywords

    Gasoline; Rockets and feathers hypothesis; Taxation; Dynamic OLS estimator;
    All these keywords.

    JEL classification:

    • L0 - Industrial Organization - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-15-00113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.