IDEAS home Printed from https://ideas.repec.org/a/taf/ijecbs/v6y1999i3p349-365.html

Regulation of the Petrol Industry in the UK: Issues and Evidence

Author

Listed:
  • Nigel Driffield

Abstract

The petrol industry has been investigated twice by the Monopolies and Mergers Commission in the last 20 years. On both occasions the MMC found that the conduct of the companies was not against the public interest. These findings were based on the perceived stable relationship between oil and petrol prices. This paper develops a model of petrol price using a co-integration approach, concluding that one must question the findings of the MMC.

Suggested Citation

  • Nigel Driffield, 1999. "Regulation of the Petrol Industry in the UK: Issues and Evidence," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(3), pages 349-365.
    • Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:349-365
    DOI: 10.1080/13571519984124
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/10.1080/13571519984124
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13571519984124?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Peter C.B. Phillips & Pierre Perron, 1986. "Testing for a Unit Root in Time Series Regression," Cowles Foundation Discussion Papers 795R, Cowles Foundation for Research in Economics, Yale University, revised Sep 1987.
    2. Daniel P. O'Brien & Greg Shaffer, 1992. "Vertical Control with Bilateral Contracts," RAND Journal of Economics, The RAND Corporation, vol. 23(3), pages 299-308, Autumn.
    3. Robert Engle & Clive Granger, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    4. Armstrong, Mark & Vickers, John, 1993. "Price Discrimination, Competition and Regulation," Journal of Industrial Economics, Wiley Blackwell, vol. 41(4), pages 335-359, December.
    5. Stevens, Jerry L, 1990. "Tobin's q and the Structure-Performance Relationship: Comment," American Economic Review, American Economic Association, vol. 80(3), pages 618-623, June.
    6. Severin Boreinstein & Andrea Shepard, 1996. "Dynamic Pricing in Retail Gasoline Markets," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 429-451, Autumn.
    7. Martin, Stephen, 1988. "Market Power and/or Efficiency?," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 331-335, May.
    8. G.F. Mathewson & R.A. Winter, 1984. "An Economic Theory of Vertical Restraints," RAND Journal of Economics, The RAND Corporation, vol. 15(1), pages 27-38, Spring.
    9. Slade, Margaret E, 1998. "Strategic Motives for Vertical Separation: Evidence from Retail Gasoline Markets," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 14(1), pages 84-113, April.
    10. Gal-Or, Esther, 1991. "Duopolistic vertical restraints," European Economic Review, Elsevier, vol. 35(6), pages 1237-1253, August.
    11. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    12. Banerjee, Anindya, et al, 1986. "Exploring Equilibrium Relationships in Econometrics through Static Models: Some Monte Carlo Evidence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 253-277, August.
    13. Vickers, John & Waterson, Michael, 1991. "Vertical Relationships: An Introduction," Journal of Industrial Economics, Wiley Blackwell, vol. 39(5), pages 445-450, September.
    14. Lin, Y Joseph, 1990. "The Dampening-of-Competition Effect of Exclusive Dealing," Journal of Industrial Economics, Wiley Blackwell, vol. 39(2), pages 209-223, December.
    15. Breusch, Trevor S & Wickens, Michael R., 1987. "Dynamic Specification, the Long Run and the Estimation of Transformed Regression Models," CEPR Discussion Papers 154, C.E.P.R. Discussion Papers.
    16. 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.
    17. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    18. 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.
    19. Andrea Shepard, 1993. "Contractual Form, Retail Price, and Asset Characteristics in Gasoline Retailing," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 58-77, Spring.
    20. Slade, Margaret E., 1990. "Strategic pricing models and interpretation of price-war data," European Economic Review, Elsevier, vol. 34(2-3), pages 524-537, May.
    21. Margaret E. Slade, 1992. "Vancouver's Gasoline-Price Wars: An Empirical Exercise in Uncovering Supergame Strategies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(2), pages 257-276.
    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. Nigel Driffield & Christos Ioannidis & David Peel, 2003. "Some Further Empirical Evidence on the Impact of Oil Price Changes on Petrol Prices," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 10(2), pages 195-203.
    2. Driffield, Nigel & Ioannidis, Christos, 2000. "Effectiveness and effects of attempts to regulate the UK petrol industry," Energy Economics, Elsevier, vol. 22(3), pages 369-381, June.

    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. Driffield, Nigel & Ioannidis, Christos, 2000. "Effectiveness and effects of attempts to regulate the UK petrol industry," Energy Economics, Elsevier, vol. 22(3), pages 369-381, June.
    2. Alderighi, Marco & Baudino, Marco, 2015. "The pricing behavior of Italian gas stations: Some evidence from the Cuneo retail fuel market," Energy Economics, Elsevier, vol. 50(C), pages 33-46.
    3. Mariano Tappata & Jing Yan, 2017. "Competition in Retail Petrol Markets," Australian Economic Papers, Wiley Blackwell, vol. 56(3), pages 201-218, September.
    4. Benjamin Atkinson & Andrew Eckert & Douglas S. West, 2009. "Price Matching And The Domino Effect In A Retail Gasoline Market," Economic Inquiry, Western Economic Association International, vol. 47(3), pages 568-588, July.
    5. Lance J. Bachmeier & James M. Griffin, 2003. "New Evidence on Asymmetric Gasoline Price Responses," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 772-776, August.
    6. Zhang, Tao & Ma, Guofeng & Liu, Guangsheng, 2015. "Nonlinear joint dynamics between prices of crude oil and refined products," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 419(C), pages 444-456.
    7. Nigel Driffield & Christos Ioannidis & David Peel, 2003. "Some Further Empirical Evidence on the Impact of Oil Price Changes on Petrol Prices," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 10(2), pages 195-203.
    8. Bello, Alejandro & Contín-Pilart, Ignacio, 2012. "Taxes, cost and demand shifters as determinants in the regional gasoline price formation process: Evidence from Spain," Energy Policy, Elsevier, vol. 48(C), pages 439-448.
    9. 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.
    10. Hasan Bakhshi & Anthony Yates, 1998. "Are UK inflation expectations rational?," Bank of England working papers 81, Bank of England.
    11. Oystein Foros & Frode Steen, 2008. "Gasoline Prices Jump Up on Mondays: an Outcome of Aggressive Competition?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2008-20, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    12. Bettendorf, Leon & van der Geest, Stephanie A. & Varkevisser, Marco, 2003. "Price asymmetry in the Dutch retail gasoline market," Energy Economics, Elsevier, vol. 25(6), pages 669-689, November.
    13. Eleni Constantinou & Avo Kazandjian & Georgios P. Kouretas & Vera Tahmazian, 2008. "Common Stochastic Trends Among The Cyprus Stock Exchange And The Ase, Lse And Nyse," Bulletin of Economic Research, Wiley Blackwell, vol. 60(4), pages 327-349, October.
    14. D. O. Olayungbo & T. A. Ojeyinka, 2022. "Crude oil prices pass-through to retail petroleum product prices in Nigeria: evidence from hidden cointegration approach," Economic Change and Restructuring, Springer, vol. 55(2), pages 951-972, May.
    15. Liu, Ming-Hua & Margaritis, Dimitris & Zhang, Yang, 2013. "Market-driven coal prices and state-administered electricity prices in China," Energy Economics, Elsevier, vol. 40(C), pages 167-175.
    16. Adrian C. Darnell, 1994. "A Dictionary Of Econometrics," Books, Edward Elgar Publishing, number 118, June.
    17. Antoniou, Fabio & Fiocco, Raffaele & Guo, Dongyu, 2017. "Asymmetric price adjustments: A supply side approach," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 335-360.
    18. Climent, Francisco & Meneu, Vicente, 2003. "Has 1997 Asian crisis increased information flows between international markets," International Review of Economics & Finance, Elsevier, vol. 12(1), pages 111-143.
    19. Gerhard Clemenz & Klaus Gugler, 2009. "Locational choice and price competition: some empirical results for the austrian retail gasoline market," Studies in Empirical Economics, in: Giuseppe Arbia & Badi H. Baltagi (ed.), Spatial Econometrics, pages 223-244, Springer.
    20. Jayant Menon, 1993. "Import Price and Activity Elasticities for the MONASH Model: Johansen FIML Estimation of Cointegration Vectors," Centre of Policy Studies/IMPACT Centre Working Papers ip-58, Victoria University, Centre of Policy Studies/IMPACT Centre.

    More about this item

    Keywords

    ;
    ;

    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:taf:ijecbs:v:6:y:1999:i:3:p:349-365. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIJB20 .

    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.