No Gouging or Other Manipulation Found in Study of Washington State Gasoline Prices

Michael Giberson

Leffler-Washington-gas price study 2008 cover.pngAccording to a year-long study of gasoline prices in the state of Washington, variations in prices across the state “are due to the cost of obtaining and transporting fuel to stations and local competition – not illegal price manipulation.”

The state’s Attorney General commissioned the study, which was conducted by University of Washington economist Keith Leffler.

“West Coast refineries are running at capacity,” [Washington Attorney General Rob] McKenna said. “We’re importing higher-priced refined gasoline to meet consumer demand, which raises average prices at the pump. Any glitches in the supply system can cause significant price spikes. Meanwhile, crude oil costs nearly four times as much as it did five years ago.”

In general, the report observed that retail gasoline prices were higher because the cost of crude oil was higher, regional variations in wholesale prices were closely related to variations in the cost of supplying fuels to terminals (though exceptions are noted), and competition within city areas is the most important factor behind remaining differences in regional retail prices.

Current average retail Washington prices were reported to be the sixth highest in the nation, in part because, as the report explains, Washington state gasoline taxes are highest in the nation.

Perhaps unlike Vermont*, gasoline consumption per person is going down in the Pacific Northwest. The Seattle Post-Intelligencer reported:

Washington, Oregon and Idaho residents are guzzling less gas per person, according to a report released Thursday by Sightline Institute, a Seattle-based think tank.

Motorists used on average nearly a gallon less each week in 2007 (7.8 gallons) than they did in 1999 (8.7 gallons), the lowest per-capita level since 1966.

Despite growth in population, overall gas consumption has been relatively flat in the region in the last nine years, the report said.

“The biggest single impetus is higher prices,” said Clark Williams-Derry, research director of Sightline. “When prices rise, people start to make different kinds of choices. … We’re traveling a little less. We’re making shorter trips and fewer trips.”

*Or maybe Vermont, too, is using less gasoline, despite the note yesterday saying that vehicle miles traveled in the state is up since 2000 even with higher prices. The Kansas City Star reports that gasoline consumption is falling nationwide:

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