Competition and consumer prices in the fuel market : insights from a small EU country

Dolšak, Janez (author)

Purpose - This study aims to analyse the effect of competition on retail fuel prices in a small European Union (EU) country with high market concentration. Design/methodology/approach - The researchers use a panel data set to estimate a fuel price equation that includes supply and demand factors as well as time-fixed effects. Findings - The study finds that more competitors in the local market decrease prices, whereas the high market share of oligopoly brands does not condition this effect. Additionally, independent brands set lower prices than wholesalers, and gas stations located near the borders of almost all neighbouring countries are associated with higher prices. Research limitations/implications - The study suggests that Slovenia’s retail fuel market maintains competitive pricing despite high oligopolistic shares because of historical regulatory influences that shaped firm behaviour and pricing strategies, along with geographical and economic factors such as Slovenia’s role as a transit country. External competitive pressures from neighbouring countries and high levels of traffic, combined with the remnants of regulatory structures, help prevent market abuses and keep fuel prices lower than in other EU countries. Practical implications - It also indicates that policy should encourage fiercer competition in the local market by increasing the density of gas stations, especially from independent brands. Originality/value - These findings may be associated with specific country characteristics. This paper introduces unique findings that shed light on the impact of a small market on competition, with a particular focus on highlighting the effect of oligopolistic brands.

• Language: English
• Keywords: EU, small countries, fuels, single market, competition, retail fuel market, market competition, market concentration, station heterogeneity
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: EF - School of Economics and Business
• Publication status: Published
• Publication version: Version of Record
• Year: 2024
• Number of pages: Str. 141-166
• Numbering: Vol. 32, iss. 95
• PID: 20.500.12556/RUL-170566
• UDC: 339.1
• ISSN on article: 2632-7627
• DOI: 10.1108/AEA-08-2023-0322
• COBISS.SI-ID: 203013379
• Publication date in RUL: 09.07.2025

Record is a part of a journal

• Title: Applied economic analysis
• Publisher: Emerald
• ISSN: 2632-7627
• COBISS.SI-ID: 68432899

Licences

• License: CC BY 4.0, Creative Commons Attribution 4.0 International
• Link: http://creativecommons.org/licenses/by/4.0/
• Description: This is the standard Creative Commons license that gives others maximum freedom to do what they want with the work as long as they credit the author.

Secondary language

• Language: Slovenian
• Keywords: EU, majhne države, goriva, enotni trg, konkurenca

Projects

• Funder: ARIS - Slovenian Research and Innovation Agency
• Project number: Z5-4577
• Name: Ali lahko energetska učinkovitost ublaži energetsko revščino v stanovanjskem sektorju?