A complex analysis of fuel market pricing strategies
Analysing margins and cost pass-through
Abstract
This study integrates the results of two empirical investigations to demonstrate the need for a complex, multidimensional approach to analysing pricing strategies in the fuel market. The first examines the cost pass-through behaviour of a vertically integrated dominant firm in the Hungarian fuel market, with particular focus on the phenomenon of asymmetric cost pass-through. The second assesses the price effects of a horizontal merger (MOL-AGIP), showing that price impacts occur in temporally differentiated phases. The combined analysis reveals that the exercise of market power appears in different forms (such as asymmetric cost pass-through and post-merger price increases) and that pricing effects demonstrate complex temporal dynamics. The main contribution is to show, using the Hungarian retail fuel market as a case study, that a comprehensive understanding of pricing strategies requires simultaneous consideration of horizontal and vertical market structures, spatial factors, and temporal dynamics.
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