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Price asymmetry in the motor fuel markets in Russia

Author

Listed:
  • I.S. Leonov

    (Lomonosov Moscow State University, Moscow, Russia)

  • A.A. Kurdin

    (Lomonosov Moscow State University, Moscow, Russia; HSE University, Moscow, Russia)

Abstract

In recent years, the fuel market in Russia has witnessed significant changes in regulation: since the end of 2018, there has been a retail price cap on fuel adjusted for inflation, a damper has been introduced since 2019, and a large tax maneuver was completed in 2024, which caused price asymmetry in the domestic market. The purpose of the study is to assess the impact of the large tax maneuver and price regulation on the competitive environment in retail fuel markets. The methodological basis of the research is price regulation theory. As part of the study, four econometric models were built using the weighted least squares method to identify the impact of damping compensation on domestic gasoline and diesel prices. Empirical data cover official statistics on production volumes and fuel prices for 2018–2023. The analysis showed that price asymmetry brings about a permanent increase in fuel prices and an inevitable rise in market concentration in the retail market. At the same time, the results of econometric modeling indicated that damping compensation did not have a restraining effect on wholesale prices. The zeroing of export duties within the large tax maneuver has further aggravated the situation, which results in Russian oil companies regaining their interest in the export option, and the only way to stabilize the market is through an embargo on fuel exports that, despite being effective in the short term, has long-term negative implications.

Suggested Citation

  • I.S. Leonov & A.A. Kurdin, 2025. "Price asymmetry in the motor fuel markets in Russia," Upravlenets, Ural State University of Economics, vol. 16(4), pages 38-53, September.
    • Handle: RePEc:url:upravl:v:16:y:2025:i:4:p:38-53
    DOI: 10.29141/2218-5003-2025-16-4-3
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    References listed on IDEAS

    as
    1. 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.
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    More about this item

    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
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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