Motor Fuels:

Gasoline Prices in the West Coast Market

GAO-01-608T: Published: Apr 25, 2001. Publicly Released: Apr 25, 2001.

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James E. Wells, Jr
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Gasoline prices in West Coast states are frequently among the highest in the nation and these states tend to see longer periods of high prices compared with other parts of the country, the West Coast gasoline market is characterized by a tight balance between supply and demand, and isolation from other U.S. gasoline markets. Both of these situations cause rapid price increases in reaction to supply disruptions. GAO's comparisons of gasoline prices in California, Oregon, and Washington found that individual markets in the three states are closely linked and are essentially part of a single market for gasoline on the West Coast. Gasoline prices for cities in these states generally followed similar patterns with respect to price increases and decreases. As a result, any event that a significantly changed prices in one state could affect gasoline prices in other West Coast states. Although California, Oregon, and Washington are essentially part of the same West Coast market, each state has attributes that tend to increase its respective gasoline prices. Moreover, within any given state, local market conditions may cause prices to vary considerably. GAO's analysis found that lifting the export ban on Alaskan North Slope crude oil caused the West Coast price of this oil to rise but did not significantly affect the price of gasoline. This report summarizes four reports: GAO-01-433R, RCED-00-100R, RCED-00-121, and RCED-99-191.

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