Price differences within retail gasoline markets

• Published in: Energy economics 2024-05, Vol.133, p.107501, Article 107501
• Main Authors: Hurtado, Carlos, González, Julia
• Format: Article
• Language: English
• Subjects: Edgeworth cycles; Firm strategy; Retail gasoline markets
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2024.107501

This paper characterizes fueling stations' pricing strategies to study price differentials within retail gasoline markets. We use a unique dataset with stations' locations and daily gasoline prices in the major cities of the continental U.S. to classify cycler and non-cycler stations. We exploit station-level variability in pricing behavior within retail gasoline markets to show that cyclers charge about 3.5¢ lower gasoline prices than non-cyclers, on average. Additionally, we confirm an almost biweekly duration of the station-level cycling behavior. Finally, we provide evidence of the relationship between consumer search and the intra-market pricing strategy heterogeneity. •This paper characterizes fueling stations' pricing strategies to study price differentials within retail gasoline markets.•We use a unique dataset with stations' locations and daily gasoline prices in the major cities of the continental U.S.•We develop a simple indicator to classify stations that exhibit price cycles.•We show cyclers charge lower than non-cyclers by analyzing station-level price behavior.•We provide evidence of consumer search to explain the intra-market pricing strategy heterogeneity.