The reorganization of fuel distribution market raises questions regarding the existence of market power in the sector. Tools of New Empirical Industrial Organization were used to analyze existence of market power in the distribution sector. Based on the studies of Bresnahan (1982) and Bresnahan (1989), an analysis of identification methods for conduct parameters was carried out in order to determine whether the methodology is appropriate for the market in question. We concluded that distributors do not effectively practice market power. Estimated values for conduct parameters show this market approaches perfect competition not monopoly.
Ethanol; NEIO; Industrial Organization; Market power
