ARIZONA

Tough Questions and Straight Answers
About Arizona Gasoline Prices

WSPA realizes that consumers have asked a lot of tough questions lately about gasoline prices. We welcome those questions and offer the following information to help foster a healthy public dialogue on these issues.

What’s going on with gasoline prices?
According to the United States Energy Information Administration (EIA), recent increases in gasoline prices nationwide have been primarily due to higher crude oil prices, which are significantly higher than last year.

Why are gasoline prices so high in Arizona?
According to AAA, the average price for unleaded regular in Arizona over recent weeks has been lower that the average of the six Western states. The EIA has reported that prices are generally higher in the Western states, observing that production costs and refinery investment per barrel are higher in the West.  In addition, Arizona is currently requiring two unique fuel formulations in the southern part of the state, which differ from gasoline sold in other areas.  According to the American Petroleum Institute (API), the proliferation of fuel types reduces the flexibility of refiners and distributors to respond to local and regional demand, which can affect gasoline prices.

Why do we sometimes see wide price variations within Arizona?
Government agencies and other petroleum experts report that, even under normal conditions, gasoline prices are likely to vary from region to region due to differing market conditions throughout the state.

How do gasoline prices compare to the costs of other products?
According to the US Bureau of Labor Statistics, which reports the Consumer Price Index (CPI), gasoline prices have risen far less than many other products we use every day, including electricity, food, housing and medical care.

Are refiners making disproportionate profits on these high gas prices?
The EIA, in a report dated March 12, 2003 asked the question: “Do current prices for petroleum products, particularly gasoline, reflect gouging?  In EIA’s estimation, the answer is ‘no’.”  This is consistent with previously reported EIA findings that “there is adequate competition on the West Coast,” and “refiner/marketers cannot extract higher profits from consumers.”

What’s being done right now to protect consumers?
Recently, the FTC stepped up its oversight by initiating daily gasoline price monitoring to guard against pricing irregularities. And the EIA has a toll-free hotline for consumers to report suspected gasoline price gouging: (800) 244-3301.

Western States Petroleum Association
1415 L Street #600, Sacramento, CA 95814

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