Full section (Hebrew)​

Segment from the forthcoming Selected Research Analyses:

  • Fuel prices are affected by the spatial characteristics of gas stations, including the size of their control area, the number of stations of the same company, and competing brands in the local area, and the extent of their control—centrality or distance from a main intersection.
  • This analysis makes innovative use of data from Waze on travel duration between gas stations to calculate the characteristics of the stations’ control areas.
  • The results support the assumption that nearby stations of the same brand cooperate, which raises the price.
  • It was found that if all gas stations belonging to a large brand become independent stations, the price declines by almost 2.5 percent.  This marked effect shows that increased competition has a significant impact on profitability, since in this specific market, the price mainly reflects the cost of purchasing fuel and taxes.
  • A policy to encourage opening stations that do not belong to the four large brands, alongside tightening of the restrictions on opening stations that do belong to the large brands, particularly in proximity to other stations of the same brand, could lower the consumer price of diesel fuel.


The retail vehicle fuel market in Israel included about 1,200 gas stations in 2017, most of which belong to four company brands, with a few belonging to a number of small competitors with nonuniform deployment across the country.  According to estimates, diesel and gasoline sales in this market were about NIS 33 billion in 2014.


This study uses data on gas stations in Israel and a formal model adjusted to the issue to estimate how the characteristics of the local area gas station affect fuel prices.  The database includes the station characteristics and 16 quarters of prices at the individual station level, with the focus on diesel prices, where competition is more significant.  The study also conducts simulations to examine how the merger of brands or splitting of large brands into independent stations may impact the price of diesel.


The study measured the distance between stations in terms of travel duration using Google Maps (Waze).  As far as is known, this is the first time a study uses data from Waze to measure distance between gas stations.  This measurement uses travel duration as an adjusted estimate of average actual traffic congestion, and is therefore more precise than an estimate based on permitted speed.  For this reason, it provides a good representation of gas station substitutability from the consumers’ standpoint.