The gas distribution system for natural gas vehicles (NGV) in Colombia is highly concentrated, which gives the retail distributors market power. The pricing mechanism appears to approximate a Bertrand type of oligopolistic model, with a dominant firm setting the prices. An analysis using a Lerner index indicates that the market structure provides markup benefits of about 40%. An econometric analysis of the determinants of prices using panel data indicates that variables other than costs affect the retail price of natural gas provided to NGV.

Key words: Natural Gas Vehicle, mark-up of benefits, market power, retail market.
JEL Classification: D43, C23.