Abstract
This paper analyzes the effects of supply local factors on fuel automotive (gasoline and diesel) pricing behavior in Spain. In doing so, we have collected information about local market conditions in which operated a sample of 529 Spanish service stations in 2007. We have also gathered weekly prices set by such service stations over 2007. This sample of stations represents accurately the competitive structure, both at regional and national level, of the Spanish market for automotive fuels. Our results suggest that competition works “imperfectly” and show how the presence of independent service stations in local markets enhances competition.
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