Spatial Competition and Pass-through of Fuel Taxes: Evidence from a Quasi-natural Experiment in Germany
Year: 2026
Type: article
Abstract: This paper analyses determinants of pass-through for Germany’s 2022 temporary fuel discount at its implementation and subsequent termination. Based on a unique dataset of fuel station characteristics and prices, we employ a two-stage Regression Discontinuity in Time (RDiT) methodology to estimate spatial pass-through variation. Our findings indicate that horizontal and vertical market structures exert an asymmetric influence on tax pass-through. Competitive pressure enhances price responsiveness to tax reductions, whereas we find the opposite pattern for the tax increase. Furthermore, independence from upstream markets is associated with lower tax pass-through, indicating the presence of double marginalisation.
DOI: 10.3828/jtep.2026.1
Authors: Frederik von Waldow, Heike Link
Institution: German Institute for Economic Research
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7126103015