Abstract
This study examines how consumers respond to price differentials by analyzing cross-border fuel purchasing between Albania and Montenegro. Using station-level sales data from 2020–2024, we find clear evidence of substitution for diesel: when Montenegrin prices fall relative to Albanian prices, diesel sales at nearby Albanian stations decline, with the strongest effects within 20 km of the nearest Montenegrin station. For gasoline, the evidence is mixed, with some indication of cross border shopping within 20 km. This difference potentially reflects the fact that trucks, whose route often crosses this border, are flexible in their choice of where to buy fuel.