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Motor Fuels: California Gasoline Price Behavior

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Report Type Reports and Testimonies
Report Date April 28, 2000
Report No. RCED-00-121
Subject
Summary:

Retail gasoline prices in the United States have risen sharply since early 1999, mostly in response to soaring world crude oil prices. Moreover, during the second half of the 1990s, retail gasoline prices throughout the United States have shown a high degree of volatility and fairly frequent spikes. Particularly in California, where consumers already generally pay higher average prices than they do elsewhere in the United States, the spikes have raised questions about the behavior of gasoline prices both within the state and between California and the rest of the country. This report answers the following questions: (1) To what extent do retail gasoline prices spike more often and higher in California than they do in the rest of the country, and what factors account for any difference? (2) Do retail gasoline prices gasoline prices in California rise faster than they fall in response to increases and decreases in the wholesale prices of gasoline and, if so, why? (3) What factors account for differences in the retail prices of gasoline between San Franciso and Los Angeles?

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