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Oligopolistic conduct: Why lack of competition makes fuel prices sticky going downwards
Jun 29: An interesting study points out that fuel prices in India at the retail level are highly elastic to global crude prices when prices are rising
8But they are not when they are falling
8And this is not just because the government imposes more taxes to mop up the benefit of lower crude prices
8In an oligopolistic environment such as in India, with a handful of oil marketing companies cornering the entire business, prices are sticky downwards.
8The study calls for ensuring more competition in the downstream sector.
8And there are other policy ramifications too from this insight
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