Gasoline Price Changes - Federal Trade Commission

Price Difference (Cents per Gallon)
45
40
35
30
25
20
15
10
5
0
-5
-10
1/1/2001
Source: OPIS
1/15/2001
THE DYNAMIC OF SUPPLY, DEMAND, AND COMPETITION
Figure 4-1: Weekly Difference Between Chicago and Houston (Gulf)
Wholesale Rack Prices (2001)
1/29/2001
2/12/2001
2/26/2001
Wood River Lemont
3/12/2001
3/26/2001
4/9/2001
4/23/2001
5/7/2001
5/21/2001
6/4/2001
6/18/2001
In both of these cases, Upper Midwest gas stations (like the Phoenix gas stations in
Chapter 1) had to pay higher prices to bring increased gasoline supplies into the Upper Midwest
during these supply restrictions.
7/2/2001
7/16/2001
7/30/2001
2. By contrast, a refinery outage in an area with ample, nearby
sources of gasoline supply had no appreciable impact on
wholesale or retail gasoline prices.
In areas with access to ample sources of gasoline supply, one refinery outage may not
have any appreciable impact. For example, on July 21, 2003, an explosion at ConocoPhillips’s
Ponca City, Oklahoma refinery caused massive damage but had little effect on gasoline prices.
During two and one-half months of repair, the refinery operated at about 60 percent of its
capacity, processing 120,000 barrels per day instead of its usual 194,000 barrels per day. Prices
for gasoline, however, did not spike in Oklahoma.
The Ponca City refinery, along with the other Oklahoma refineries, produces far more
gasoline than the area demands. To meet demand within the state after the explosion, the
refineries simply reduced the amount of gasoline that they exported to other areas. Thus, supply
in Oklahoma remained stable, although supply leaving Oklahoma declined somewhat. This
reduction in supply to other areas did not significantly affect gasoline prices in those areas,
CHAPTER 4: THE REGIONAL LEVEL 71
8/13/2001
8/27/2001
9/10/2001
9/24/2001
10/8/2001
10/22/2001
11/5/2001
11/19/2001
12/3/2001
12/17/2001