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Fuel Prices and Station Heterogeneity on Retail Gasoline Markets

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  • Siekmann, Manuel
  • Haucap, Justus
  • Heimeshoff, Ulrich

Abstract

Price levels and movements on gasoline and diesel markets are heavily debated among consumers, policy-makers, and competition authorities alike. In this paper, we empirically investigate how and why price levels differ across gasoline stations in Germany, using eight months of data from a novel panel data set including price quotes from virtually all German stations. Our analysis specifically explores the role of station heterogeneity in explaining price differences across gasoline stations. Key determinants of price levels across fuel types are found to be ex-refinery prices as key input costs, a station's location on roads or highway service areas, and brand recognition. A lower number of station-specific services implies lower fuel price levels, so does a more heterogeneous local competitive environment.

Suggested Citation

  • Siekmann, Manuel & Haucap, Justus & Heimeshoff, Ulrich, 2015. "Fuel Prices and Station Heterogeneity on Retail Gasoline Markets," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113040, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:113040
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    4. Reid B. Taylor & Erich Muehlegger, 2025. "The Effects of Competition in the Retail Gasoline Industry," NBER Working Papers 33569, National Bureau of Economic Research, Inc.
    5. Lea Bernhardt & Xenia Breiderhoff & Ralf Dewenter, 2025. "New Evidence on Price Effects of Transparency Regulations in European Fuel Markets," Journal of Industry, Competition and Trade, Springer, vol. 25(1), pages 1-27, December.
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    7. Oschmann, Sebastian, 2025. "Vertical market structure matters: The case of a horizontal retail merger in the German gasoline market," DICE Discussion Papers 418, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    8. Timothy Holt & Mitsuru Igami & Simon Scheidegger, 2024. "Detecting Edgeworth Cycles," Journal of Law and Economics, University of Chicago Press, vol. 67(1), pages 67-102.

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    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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