Gasoline Pricing Disparities Between Adjacent Areas of New York and Pennsylvania

EMD-80-77: Published: May 22, 1980. Publicly Released: May 28, 1980.

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GAO conducted a review to determine why retail gasoline prices in Chautauqua County, New York, are higher than in Warren County, Pennsylvania, even though a substantial amount of the gasoline requirements of both areas is furnished by the same refinery.

Retail gasoline prices can vary for a number of reasons including differences in wholesale prices, retail margins, and gasoline taxes. It was found that New York State's gasoline sales tax accounted for the slightly higher gasoline prices at the refinery's New York retail stations. GAO also found wholesale pricing differences between the refinery in question and other oil companies serving the two counties even though a substantial amount of the gasoline came from the refinery. This is because the refinery supplies gasoline to other companies under an exchange system whereby the gasoline is priced by the receiving oil company in accordance with its overall pricing structure. Consequently, other companies could charge either higher or lower prices than those of the refinery.

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