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Abstract

We analyse how the contract structure between gas stations and the wholesale operator affects price strategies. Using daily data on prices of different gas stations in Spain, and exploiting the introduction of a regional excise duty in gas stations, the paper finds that independent dealers charge lower margins and react more to competition than supplier operated and branded dealers. We use this result to interpret the inexistent reduction in markups that followed an increase in independent stations due to a change in the Spanish regulation that took place in 2013.