GAOreport_Oregongasprices - United States General...

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Page 1 GAO-01-433R Oregon Gasoline Prices United States General Accounting Office Washington, DC 20548 February 23, 2001 The Honorable Gordon H. Smith United States Senate Subject: Motor Fuels: Gasoline Prices in Oregon Dear Senator Smith: As requested, we are providing information on (1) factors affecting retail gasoline prices in Oregon, including transportation costs, taxes, costs of full service, and other supply and demand conditions, and (2) how gasoline price trends in Portland, Oregon, compare with trends in other West Coast cities. This letter supplements the information contained in our letter to you of February 23, 2000, 1 and summarizes the material presented in our briefing to your staff on January 25, 2001. As you know, Oregon’s gasoline prices, along with those of California and Washington State, are currently among the highest in the United States. In response to rising crude oil costs in 1999, gasoline prices rose nationwide and have remained relatively high compared with prices in the preceding 5 years. Furthermore, Oregon, Washington and California prices remained above the national average, due in part to higher gasoline taxes, special fuel restrictions (in California), and a generally tight supply-and-demand balance in the region. According to the American Automobile Association’s daily gasoline price survey for February 14, 2001, the average price for regular unleaded gasoline in Oregon is about $1.54 per gallon, compared with $1.66 in California, $1.54 in Washington, and a national average of $1.49. These state averages mask a great deal of price variation within states and average prices for particular cities will typically be substantially higher or lower than state average prices. 2 Factors Affecting Gasoline Prices in Oregon Among the factors affecting gasoline prices in Oregon are higher-than-average costs associated with transporting gasoline from refiners to consumers, higher-than- average state gasoline taxes, and a prohibition on self-service gasoline stations. In 1 Motor Fuels: Gasoline Price Spikes in Oregon in 1999 (GAO/RCED-00-100R, Feb. 23, 2000). 2 For example, in the same survey, out of 15 cities in California, Oregon, and Washington, the average retail price of unleaded regular gasoline varied from a low of about $1.43 per gallon in Spokane, Washington, to a high of $1.84 in San Francisco, California. Source: American Automobile Association, Daily Fuel Gauge Report (Feb. 14, 2001).
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Page 2 GAO-01-433R Oregon Gasoline Prices addition, specific local supply and demand conditions at any given time can affect prices of gasoline in Oregon compared with other states. Gasoline transportation costs are higher in Oregon than in California or in Washington because (1) Oregon has no refining capacity and (2) a greater proportion of its gasoline demand comes from rural driving. Without the capacity to refine its own gasoline, Oregon must acquire gas from refineries in northern Washington, and—to a lesser extent—in California. The bulk of Oregon’s gasoline has typically
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GAOreport_Oregongasprices - United States General...

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