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Natural Gas Vehicles: Consequences for Fuel Markets and the Environment

Author

Listed:
  • Roberto Amaral-Santos
  • Ariaster Chimeli
  • João Paulo Pessoa

Abstract

Policies to adopt cleaner fuels have become increasingly important, but their impacts on incumbent fuel prices and resulting greenhouse gas emissions remain unclear. We use a panel dataset on weekly prices at the gas station level in a large Brazilian state to study how the growth of natural gas, a cheaper and less carbon-intensive alternative to traditional fuels, impacted retail prices, and profit margins of gasoline and ethanol. Applying an IV strategy, we estimate that prices and margins have fallen. The intensified competition in the fuel market boosted fuel demand, leading to higher emissions of GHGs and other pollutants. JEL Classification: L11 Production, Pricing, and Market Structure; size distribution of firms; L13 Oligopoly and Other Imperfect Markets; Q31 Nonrenewable Resources and Conservation: Demand and Supply; prices; Q41 Energy: Demand and Supply; prices; Q53 Air Pollution; water pollution; noise; hazardous waste; solid waste; recycling

Suggested Citation

  • Roberto Amaral-Santos & Ariaster Chimeli & João Paulo Pessoa, 2026. "Natural Gas Vehicles: Consequences for Fuel Markets and the Environment," The Energy Journal, , vol. 47(1), pages 1-20, January.
    • Handle: RePEc:sae:enejou:v:47:y:2026:i:1:p:1-20
    DOI: 10.1177/01956574251377751
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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