Liberalisation of the gas industry in Europe. Does the European Union support efficacious regulatory solutions?

This paper verified if the EU-favoured regulatory tools influenced the level of competition in EU members’ gas sectors. Dynamic panel models were applied to an unbalanced sample of 22 countries between 1998 and 2013 to check the efficacy of 11 EU regulations in activating gas suppliers’ switching.
Estimation results supported the hypothesis that the regulatory tools that improved liquidity of the gas wholesale market and lowered gas market entry barriers related to gas network encouraged higher gas suppliers’ switching. Additionally, privatisation of gas incumbent companies had a positive effect on competition in the gas industry in the short and long term. To analyse the joint impact of regulations on the gas competition a simple liberalisation index was constructed. The conclusion was that the more regulatory tools were implemented in member’s gas market, the higher was the switching rate.