Gasoline Price Changes - Federal Trade Commission

Price (Cents per Gallon)
200
190
180
170
160
150
140
130
120 0
1/1/2004
Source: OPIS
THE DYNAMIC OF SUPPLY, DEMAND, AND COMPETITION
Figure 5-7: 2004 Charlotte-Gastonia, NC and Rock Hill, SC Weekly Retail
Unleaded Regular Gasoline Prices (includes tax)
1/15/2004
Charlotte-Gastonia, NC
Rock Hill, SC
1/29/2004
2/12/2004
2/26/2004
3/11/2004
3/25/2004
4/8/2004
4/22/2004
5/6/2004
5/20/2004
6/3/2004
6/17/2004
7/1/2004
7/15/2004
2. Regulations regarding the methods stations may use to sell gasoline
can influence the retail price of gasoline.
Statutory bans on self-service sales 25 and restrictions on below-cost sales 26 appear to
increase gasoline prices. Both types of laws appear to force retail gasoline prices higher by
protecting existing retailers from more efficient competitors. 27
Banning self-service stations. Although safety was the rationale for some states’ earlier
prohibitions on self-service gasoline sales, this ban – now on the books only in New Jersey and
Oregon – also appears to rest on a desire to protect smaller retailers from structural changes in
the marketplace. 28 By banning self-service, this state law essentially requires consumers to buy
gasoline bundled with services that are likely to increase costs – that is, having staff available to
pump the gasoline. One study concluded that self-service bans have imposed costs on large and
diffuse groups of consumers, while providing only minor benefits to narrow interest groups, such
as small service station owners. 29 Some academic experts have estimated that self-service bans
cost consumers between $0.02 and $0.05 per gallon. 30
Banning below-cost sales. About 11 states have a type of below-cost sales or minimum
mark-up laws, which typically either prohibit a gas station from making sales below a certain
defined cost or require a gas station to charge a minimum amount above its wholesale gasoline
cost. Pursuant to such a law in Minnesota, for example, the Minnesota Department of
CHAPTER 5: STATE & LOCAL POLICIES, & VERTICAL INTEGRATION 113
7/29/2004
8/12/2004
8/26/2004
9/9/2004
9/23/2004
10/7/2004
10/21/2004
11/4/2004
11/18/2004
12/2/2004
12/16/2004