Price Responses to Seasonal Demand Changes in the Swedish Gasoline Market

Abstract

The demand for gasoline in Sweden follows a seasonal cycle. The paper investigates the response in prices and profits over the cycle. In contrast to what has been found for the gasoline market in the United States, we find no support for seasonal price changes compatible with the theories for cyclical variations of intensity of competition. We also investigate whether the effects on margins of the demand fluctuations induced by tax increases are compatible with these theories and find this not to be the case. Some possible explanations for this difference between Sweden and the United States are discussed.Seasonal cycles; gasoline market