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Archive for September 3rd, 2013

Competition Law Everywhere

with 3 comments

sixt-par-rocco-siffredi-je-monte-souvent-a-plusieurs

In Montenegro, where I spent my hols, the price of a liter of gasoline is €1.38.

This price is the same everywhere in the country. And it is the same in all petrol station networks.

Me find this reasonably cheap as compared to most Western EU countries. But me also find this price curiously uniform.

Two obvious explanations spring to my obsessed antitrust mind: 1. cartel;  2. government regulation.

There’s worse though: a well-known car rental agency has confronted me with a real life example of abusive unfair pricing.

If you don’t return the car with the initial quantity of oil, the car rental company charges three times the price per missing liter of gasoline (!) – unless you pay black cash, in which case they charge you €1.5/liter to refuel the car…

I fully grasp that car rental firms want to recover vehicles with a sufficient quantity of gasoline, so as to avoid the costs of refueling them constantly.

But the alternative would be to charge customers for the missing quantity of gasoline at a rate equal to 1.38€ liter + an average increment covering the cost incurred for refuelling the vehicles.

I have not done the math short of data on this (+ I was on hols), but the 3x price formula looks really excessive.

The bottom line: yet another tactic that seeks to exploit the lazy mind bias of locked-in consumers.

Written by Nicolas Petit

3 September 2013 at 3:47 pm

Posted in Uncategorized