This paper evaluates the impact that investigation and regulation of the UK petrol industry has had on the profitability of the companies. Using a gross margin for petrol, we estimate a series of variable parameter autoregressive processes. The results demonstrate that the 1979 Monopolies and Mergers Commission investigation into the industry, caused a long term decline in profit margins in the industry, despite the fact that no recommendations or undertakings were made. This cannot however be said for subsequent investigations.
Bibliographical noteNOTICE: this is the author’s version of a work that was accepted for publication in Energy Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Driffield, Nigel L. and Ioannidis, Christos (2000). Effectiveness and effects of attempts to regulate the UK petrol industry. Energy Economics, 22 (3), pp. 369-381. DOI 10.1016/S0140-9883(99)00036-5
- petrol margins
- monopolies and mergers commission