IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i14p4211-d592992.html
   My bibliography  Save this article

Competition in a Wholesale Fuel Market—The Impact of the Structural Changes Caused by COVID-19

Author

Listed:
  • Sylwester Bejger

    (Faculty of Economic Sciences and Management, Nicolaus Copernicus University in Toruń, 87-100 Toruń, Poland)

Abstract

Liquid fuels obtained in refining crude oil are one of the most important energies in economic activity. The domestic wholesale market for liquid fuels is of decisive importance for price formation in the national economy. The noncompetitive behavior of the market players at this level of the distribution chain can significantly affect all downstream price levels and the producer–consumer surplus balance. Therefore, the competitiveness of this market should be screened and assessed regularly, especially when significant external factors change. This article attempts to evaluate the impact of structural changes on the global market of crude oil and energy products after the outbreak of the COVID-19 pandemic on the competitiveness of the wholesale fuel market in Poland. Using asymmetry of the reaction of product prices to changes in the prices of inputs as a marker of noncompetitive behavior and the NARDL model as a test specification, the price paths of market players before and after the occurrence of structural changes in the inputs’ processes were examined. Significant changes in the competitive behavior of players were revealed after the occurrence of structural changes at the beginning of the pandemic period in the year 2020. These changes may indicate enhanced competition and mitigation of potential market power abuse.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:14:p:4211-:d:592992
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/14/4211/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/14/4211/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Duffy-Deno, Kevin T., 1996. "Retail price asymmetries in local gasoline markets," Energy Economics, Elsevier, vol. 18(1-2), pages 81-92, April.
    2. Giliola Frey & Matteo Manera, 2007. "Econometric Models Of Asymmetric Price Transmission," Journal of Economic Surveys, Wiley Blackwell, vol. 21(2), pages 349-415, April.
    3. Anindya Banerjee & Juan Dolado & Ricardo Mestre, 1998. "Error‐correction Mechanism Tests for Cointegration in a Single‐equation Framework," Journal of Time Series Analysis, Wiley Blackwell, vol. 19(3), pages 267-283, May.
    4. Karagiannis, Stelios & Panagopoulos, Yannis & Vlamis, Prodromos, 2015. "Are unleaded gasoline and diesel price adjustments symmetric? A comparison of the four largest EU retail fuel markets," Economic Modelling, Elsevier, vol. 48(C), pages 281-291.
    5. 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.
    6. Chattopadhyay, Manojit & Kumar Mitra, Subrata, 2015. "Exploring asymmetric behavior pattern from Indian oil products prices using NARDL and GHSOM approaches," Energy Policy, Elsevier, vol. 86(C), pages 262-272.
    7. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    8. Oladunjoye, Olusegun, 2008. "Market structure and price adjustment in the U.S. wholesale gasoline markets," Energy Economics, Elsevier, vol. 30(3), pages 937-961, May.
    9. Reilly, Barry & Witt, Robert, 1998. "Petrol price asymmetries revisited," Energy Economics, Elsevier, vol. 20(3), pages 297-308, June.
    10. 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.
    11. Sam Peltzman, 2000. "Prices Rise Faster than They Fall," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 466-502, June.
    12. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    13. repec:ipg:wpaper:2014-569 is not listed on IDEAS
    14. 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.
    15. Jochen Meyer & Stephan von Cramon‐Taubadel, 2004. "Asymmetric Price Transmission: A Survey," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(3), pages 581-611, November.
    16. 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.
    17. Sylwester Bejger, 2015. "Investigation Of The Nature Of Strategic Interactions In The Polish Wholesale Fuel Market: Statistical Analysis Of A Market Structure And A Price Mechanism," Acta Universitatis Nicolai Copernici, Ekonomia, Uniwersytet Mikolaja Kopernika, vol. 46(1), pages 77-95.
    18. Atil, Ahmed & Lahiani, Amine & Nguyen, Duc Khuong, 2014. "Asymmetric and nonlinear pass-through of crude oil prices to gasoline and natural gas prices," Energy Policy, Elsevier, vol. 65(C), pages 567-573.
    19. Severin Borenstein & A. Colin Cameron & Richard Gilbert, 1997. "Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(1), pages 305-339.
    20. 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.
    21. Meyler, Aidan, 2009. "The pass through of oil prices into euro area consumer liquid fuel prices in an environment of high and volatile oil prices," Energy Economics, Elsevier, vol. 31(6), pages 867-881, November.
    22. Andrew Eckert, 2013. "Empirical Studies Of Gasoline Retailing: A Guide To The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 140-166, February.
    23. Kaufmann, Robert K. & Laskowski, Cheryl, 2005. "Causes for an asymmetric relation between the price of crude oil and refined petroleum products," Energy Policy, Elsevier, vol. 33(12), pages 1587-1596, August.
    24. Farkas, Richárd & Yontcheva, Biliana, 2019. "Price transmission in the presence of a vertically integrated dominant firm: Evidence from the gasoline market," Energy Policy, Elsevier, vol. 126(C), pages 223-237.
    25. Marcus Asplund & Rickard Eriksson & Richard Friberg, 2000. "Price Adjustments by a Gasoline Retail Chain," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 101-121, March.
    26. MacKinnon, James G, 1996. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 601-618, Nov.-Dec..
    27. 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.
    28. Mariano Tappata, 2009. "Rockets and feathers: Understanding asymmetric pricing," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 673-687, December.
    29. Sofronis Clerides, 2010. "Retail Fuel Price Response to Oil Price Shocks in EU Countries," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 4(1), pages 25-45, June.
    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. An Cheng & Tonghui Chen & Guogang Jiang & Xinru Han, 2021. "Can Major Public Health Emergencies Affect Changes in International Oil Prices?," IJERPH, MDPI, vol. 18(24), pages 1-13, December.
    2. Indre Siksnelyte-Butkiene, 2021. "Impact of the COVID-19 Pandemic to the Sustainability of the Energy Sector," Sustainability, MDPI, vol. 13(23), pages 1-19, November.
    3. Michał Bernard Pietrzak & Marta Kuc-Czarnecka, 2022. "Transformation of Energy Markets: Description, Modeling of Functioning Mechanisms and Determining Development Trends," Energies, MDPI, vol. 15(15), pages 1-6, July.
    4. Sylwester Bejger, 2024. "Machine Learning in Cartel Screening—The Case of Parallel Pricing in a Fuel Wholesale Market," Energies, MDPI, vol. 17(16), pages 1-17, August.
    5. Elena Sidorova & Ekaterina Sebechenko & Yury Kostyukhin & Diana Boboshko & Alexey Kostin & Olga Kostina & Natalia Vikhrova, 2021. "Formation of a Sustainable Mechanism of Preferential VAT Taxation of Exports as Evidenced by the Russian Federation Practice," Economies, MDPI, vol. 9(4), pages 1-21, December.

    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, 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.
    2. 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.
    3. 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.
    4. Ebru Yuksel Haliloglu & M. Hakan Berument, 2024. "The Asymmetric Effects of Crude Oil Prices and Exchange Rates on Diesel Prices for 27 European Countries," Global Business Review, International Management Institute, vol. 25(4), pages 888-912, August.
    5. 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.
    6. 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).
    7. Perdiguero-García, Jordi, 2013. "Symmetric or asymmetric oil prices? A meta-analysis approach," Energy Policy, Elsevier, vol. 57(C), pages 389-397.
    8. 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.
    9. Rahman, Mohammad Chhiddikur, 2020. "Welfare Impact of Asymmetric Price Transmission on Bangladesh Rice Consumers," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 242248, June.
    10. 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.
    11. Deltas, George & Polemis, Michael, 2020. "Estimating retail gasoline price dynamics: The effects of sample characteristics and research design," Energy Economics, Elsevier, vol. 92(C).
    12. Polemis, Michail & Fotis, Panagiotis, 2011. "The gasoline Industry in European Union and the USA," MPRA Paper 35097, University Library of Munich, Germany.
    13. 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).
    14. Zacharias Bragoudakis & Stavros Degiannakis & George Filis, 2019. "Oil and pump prices: is there any asymmetry in the Greek oil downstream sector?," Working Papers 268, Bank of Greece.
    15. 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.
    16. 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.
    17. Kristoufek, Ladislav & Lunackova, Petra, 2015. "Rockets and feathers meet Joseph: Reinvestigating the oil–gasoline asymmetry on the international markets," Energy Economics, Elsevier, vol. 49(C), pages 1-8.
    18. 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).
    19. Farkas, Richárd & Yontcheva, Biliana, 2019. "Price transmission in the presence of a vertically integrated dominant firm: Evidence from the gasoline market," Energy Policy, Elsevier, vol. 126(C), pages 223-237.
    20. José María Martín-Moreno & Rafaela Pérez & Jesús Ruiz, 2019. "Evidence about asymmetric price transmission in the main European fuel markets: from TAR-ECM to Markov-switching approach," Empirical Economics, Springer, vol. 56(4), pages 1383-1412, April.

    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:gam:jeners:v:14:y:2021:i:14:p:4211-:d:592992. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.