The impact of fuel tourism on retailers' diesel price in Spanish neighbouring regions

Desiderio Romero-Jordán (1) , Marta Jorge (2) , Santiago Álvarez-García (3)

1 Economía Aplicada II
2 Economía
3 Economía

Since 1986, car fuel consumption in Spain is subject to the Special Hydrocarbons Tax and the Value Added Tax. In addition, since 2002 regional governments have been able to apply a regional excise duty on hydrocarbons. This article analyses the impact that such a regional tax has on the retailer's diesel price at the border of the province of Lugo (in the region of Galicia) and the province of Leon (in the region of Castile-Leon) (only the former region has the regional tax). Evidence shows that variations in the price of diesel at the border of Lugo are of the same sign but of lower intensity than at the border of Leon (the price-price elasticity is 0.8060). These results suggest that service stations located in regions with higher excise duties use their price policy to lessen the negative effects generated for fuel tourism.

Mots clés: Social Sciences & Humanities

Domaines: Économie et finance quantitative [q-fin]

Desiderio Romero-Jordán, Marta Jorge, Santiago Álvarez-García. The impact of fuel tourism on retailers' diesel price in Spanish neighbouring regions. Applied Economics, 2011, 45 (04), pp.407-413. ⟨10.1080/00036846.2011.605757⟩. ⟨hal-00737934⟩