Conference on Competition in Petrol Distribution in Catalonia

Presentation of the Study: «Competition in Petrol Distribution in Catalonia»

Article

Joan-Ramon Borrell (jrborrell@ub.edu)
Staff lecturer with the Department of Economic Policy of the University of Barcelona

Abstract

This paper presents a summary of the study into competition between service stations in Catalonia in the provision of the petrol distribution service, written by Joan-Ramon Borrell and Jordi Perdiguero, researchers with the University of Barcelona, commissioned by the Catalan Antitrust Court. The study of the petrol sector is relevant due to the economic significance of fuels as the input of a large part of the transport of people and goods. In addition, studying how competition works in recently liberalised sectors is highly pertinent for determining the extent to which the liberalisation processes have worked and what needs to be improved.

The content of the study is structured in five sections, which correspond to the five stages in the methodology of consensus for the economic analysis of competition: definition of the relevant market; evaluation of mergers; evaluation of the power of the market; evaluation of dynamic competition; and evaluation of the efficiencies of the sector. The research provides a capital of great interest to the study into competition between service stations: the geographical references of the location of all of the inter-urban petrol stations in Catalonia. It also constructs and analyses other determinant data such as, for example, the distances in kilometres and in travelling time between them, the number of inhabitants in their environment, and traffic intensities on the roads closest to them.

These data have permitted a study into the effect of rivalry on petrol prices, which is the price increase charged by service stations that have no rivalry in their local environments. On the basis of this analysis, a series of recommendations are extracted that may be useful both for lawyers and for economists in the definition of markets in cases of competition, and for decision-making both in terms of competition and of regulation of the sector.


Keywords

Catalonia, competition, distribution, economic analysis, petrol, study


Submission date: November 2006
Published in: July 2007