Thursday, May 22, 2008

What's happening in Chigago and Long Island?

Living in California, one got the impression that the rest of the nation wasn't feeling the pressure of higher gasoline prices - at least not so much. California gasoline prices have tended to be 25 cents higher than elsewhere, so when national news outlets were reporting on $3.25 a gallon in Ohio, it didn't seem so bad for them, especially when someone in Los Angeles was shelling out $3.50. And while there has been a change in behavior in California (driving less, outrage over prices), one wondered if that was confined to the Golden State.

Apparently that may change. Chicago and Long Island, to take two moderately representative high-population regions, now have higher gas prices:

This is puzzling. California has fuel formula requirements, taxes, and consumer demand that usually make it the price-leader for gasoline. What's changed that makes Chicago and Long Island beat it?


I recall a This American Life episode called "The Fix is In" or something like that. It recounted that Chicago had expensive milk prices and the host joked that there was a conspiratorial price-fixing scheme for milk in Chicago, only to find out that there really *was* a milk-price-fixing conspiracy in Chicago.

Perhaps the milk folks have recently found a new place?

By Anonymous Anonymous, at 5/22/2008 10:07 AM  

Chicago has a high state tax compared to surrounding states, have the ethanol summer ozone blend requirement, and have always jack up city prices 10 or 20 cents higher than suburbs.

By Anonymous Anonymous, at 5/22/2008 10:38 AM  

Chicago also has unique formulation requirements, more ethanol I believe, so Chicago's gas is "special order" and costs more.

By Anonymous Anonymous, at 5/22/2008 7:33 PM  

Post a Comment