Premium fuels in the Portuguese retail market

: determinants of consumer preference and willingness to pay

Abstract

Since the implementation of the simple fuel law in April 2015 where all fuel retail operators were required to sell Simple Fuels (SF) (Liquid Fuels according to the basic refining specification and without additional additives) at fuel retail stations that demand for Premium Fuels (PMF) has progressively increased, as well as the average price differential between SF and PMF.The main objective of this dissertation is to expand the current understanding of which factors affect the choices of Portuguese drivers for PMF and their Willingness to Pay (WP). An online survey was conducted. Results show that consumer choices for PMF are quality oriented and that quality is evaluated through the brand credibility, although consumers consider the Oil Companies (OC) PMF more credible than the Hypermarket Chains. Not only is brand credibility a predictor of frequency of purchase, but it also influences WTP, nevertheless it depends on the context in which the choice is made, since consumers prefer OC branded PMF and are willing to pay a higher price for their PMF. Frequency of purchase and WTP are also strongly related to knowledge of PMF, moreover consumers who have higher knowledge of PMF are willing to pay up to 5 cents/L more. Consumer knowledge of PMF has a moderating effect between quality consciousness and frequency of PMF purchase. Sociodemographic data do not influence either frequency of purchase or WTP. Limitations and suggestions for future research are discussed.

Date of Award	21 Oct 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Sérgio Paulo Moreira (Supervisor)