WIT Press


The European Gas Market: The Effects Of Liberalization On Retail Prices

Price

Free (open access)

Paper DOI

10.2495/ESUS070411

Volume

105

Pages

10

Published

2007

Size

315 kb

Author(s)

G. Capece, F. Di Pillo, M. Gastaldi & N. Levialdi

Abstract

This paper aims to analyse the effects deriving from the liberalization process in Europe following Directive 98/30/EC. More specifically, the objective is to analyse the competitiveness in the retail market. In order to do so, it is necessary to begin by observing the average retail prices established by various European retail operators, and their differences regarding the two categories of consumers (domestic and industrial). The cost of imported natural gas plays an important role in the determination of the retail price. Thus we investigate the relationship between the retail and import price, and the changes in this relationship due to the liberalization process. Keywords: gas market liberalization, natural gas retail prices, natural gas import prices, linear regression analysis. 1 Introduction The liberalization of the gas market in Europe began due to the first gas directive (Directive 98/30/EC) [1], which established common rules regarding the storage, transmission, supply and distribution of natural gas. This paper aims to investigate the effects on the retail market stemming from the European liberalization process. The retail price of a service offered by firms competing in interconnected networks depends on several factors such as the production, transport and distribution costs, which directly affect the retail price of natural gas. The

Keywords

gas market liberalization, natural gas retail prices, natural gas import prices, linear regression analysis.