A Review of West Coast Gasoline Pricing and the Impact of Regulations

Publisher Website
Google Scholar
Abstract
There have been numerous proposals for legislating restrictions on vertical supply relationships on the West Coast and elsewhere. However, there has not been a systematic examination of gasoline prices on the West Cost, relative to the rest of the country, to understand the size of possible pricing anomalies. We examine the differences in the price of gasoline on the West Coast and the Gulf Coast both at the rack (wholesale) and retail. We also examine structural factors that have kept average West Coast prices higher than elsewhere, such as the higher costs to produce CARB gasoline and higher opportunity costs to produce conventional gasoline, higher shipping costs, Unocal's patents on CARB gasoline blending, higher taxes, Oregon's ban on self-service gasoline, and higher land costs. While a number of these factors are difficult to quantify, they would appear to explain most or possibly all of the measured difference in average prices.