The Regulation of Fuel Retailing &; Rural Development Policy : Downstream retail sector regulation

Limited competition among the few fuel retailers in rural and remote locations results in fuel pricing problems, such as high rural fuel prices and rural-urban fuel price differentials. Thus, the regulation of fuel retailing activities in these locations is expected to resolve these problems, and thus contribute to a rural development policy. These problems are of concern to governments and rural communities, primarily because high fuel prices generate significant multiplier effects on the cost of rural living and economic activities.The author argues that regulation of fuel retailing is likely to contribute significantly to resolving the research problems within the context of an integrated approach to rural development. The author further argues that this approach could lead to a paradigm shift in the mix of fuels consumed in rural and remote locations, and hence cause a reduction in fuel prices as well as the rural-urban fuel price differentials.