Gasoline Price Changes - Federal Trade Commission

GASOLINE PRICE CHANGES:
For example, $2.00 per gallon gasoline in 1974 was actually more expensive, in terms of the number of hours the
average consumer would have to work to earn it, than $2.00 per gallon gasoline in 2004.
3. OPEC is an international organization of countries with control over a large proportion of the crude supply.
Currently, OPEC members include Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia,
United Arab Emirates, and Venezuela. See OPEC, Who Are OPEC Member Countries?, at
http://www.opec.org/library/FAQs/aboutOPEC/q3.htm (June 28, 2005).
4. These remarks come from two public conferences held by the Commission (on August 1, 2001, and May 8-9,
2002) on factors that affect refined petroleum product prices. Participants in those conferences detailed the central
factors that may affect the level and volatility of refined petroleum product prices. The FTC has incorporated much
of the testimony and presentations from these conferences into its work. See generally PETROLEUM MERGER
REPORT, supra note 1; Market Forces, Anticompetitive Activity, and Gasoline Prices: FTC Initiatives to Protect
Competitive Markets: Hearing on Status of U.S. Refining Industry Before the Subcomm. on Energy and Air Quality,
House Comm. on Energy and Commerce, 108th Cong. 15-33 (July 15, 2004) (Statement of the FTC presented by
William E. Kovacic, General Counsel) (detailing factors that affect the price of gasoline, and the gasoline price
monitoring and investigation project), available at http://www.ftc.gov/os/2004/07/040715gaspricetestimony.pdf.
See also John Cook, Remarks at the Federal Trade Commission Conference on Factors that Affect Prices of Refined
Petroleum Products 49 (Aug. 2, 2001) [hereinafter, citations to conference transcripts include the speaker’s last
name, transcript date, and page cite(s)]. John Felmy of the American Petroleum Institute (API) similarly noted that
“gasoline prices are determined fundamentally by crude oil prices as the most important component.” Felmy 8/2 at
45. Transcripts of the Conference and presentations are available at http://www.ftc.gov/bc/gasconf/index.htm.
5. See also Verleger 8/2 at 7; Montgomery 5/8 at 12; Hogarty 5/9 at 25.
6. Regression analysis refers to statistical techniques to estimate the relationship between different variables, such as
gasoline prices and crude oil prices, based on real world data. More complex regression analysis and more
disaggregated data may give a somewhat different estimate, but changes in the price of crude oil explain the vast
majority of changes in the price of gasoline. See also supra note 1.
7. More complex regression analysis and more disaggregated data may give a somewhat different estimate, but
changes in the price of crude oil explain the vast majority of changes in the price of gasoline. See also supra note 1.
8. WTI crude oil price is a frequent benchmark, but is not necessarily the same as the crude oil acquisition costs
noted above, which may be lower than the WTI price.
9. EIA, Top Suppliers of U.S. Crude Oil Imports, 2003, at http://www.eia.doe.gov/neic/rankings/
crudebycountry.htm (last modified Nov. 4, 2004).
10. See generally JOANNE SHORE & JOHN HACKWORTH, EIA, IMPACTS OF THE VENEZUELAN CRUDE OIL
PRODUCTION LOSS (2003), at http://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2003/venezuelan/
vzimpacts.pdf.
11. EIA, VENEZUELA COUNTRY ANALYSIS BRIEF (June 2004), at http://www.eia.doe.gov/emeu/cabs/venez.html.
12. Shore & Hackworth, supra note 10.
13. Residual fuel oil includes classes of relatively heavy refined products used in electric power generation and
other industrial purposes. Distillate fuel oils include several grades of diesel and fuel oil products used in, among
other things, highway diesel engines and heating homes. Jet fuel is used for commercial and military turbojet and
turboprop aircraft engines. Liquefied petroleum gases are a variety of gases produced in the refining of crude oil,
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FEDERAL TRADE COMMISSION, JUNE 2005