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Price Effects of Boutique Motor Fuels: Federal Environmental Standards, Regional Fuel Choices, and Local Gasoline Prices

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  • W.David Walls
  • Frank W. Rusco

Abstract

Federal clean air regulations have spawned a proliferation of motor fuel types that have created differentiated markets for motor fuels, increased the cost of supplying these fuels, and reduced the capacity of the supply infrastructure. In this paper we examine wholesale gasoline prices in 99 US cities over a time horizon of 204 weeks using a panel data regression model to explain fuel prices as a function of fuel attributes, the price of crude oil, and seasonal and city-market-specific effects. Our results show that fuel prices are related to the use of a special blend not widely available in the region and more costly to make, and the situation of the particular city market in relation to major refining centers or other sources of supply.

Suggested Citation

  • W.David Walls & Frank W. Rusco, 2007. "Price Effects of Boutique Motor Fuels: Federal Environmental Standards, Regional Fuel Choices, and Local Gasoline Prices," The Energy Journal, , vol. 28(3), pages 145-164, July.
    • Handle: RePEc:sae:enejou:v:28:y:2007:i:3:p:145-164
    DOI: 10.5547/ISSN0195-6574-EJ-Vol28-No3-8
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    Cited by:

    1. Michael C. Davis, 2021. "An Examination Of The Effects Of Environmental Regulations On Retail Gasoline Price Seasonality," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 178-193, January.
    2. Zavaleta, Armando & Walls, W.D. & Rusco, Frank W., 2015. "Refining for export and the convergence of petroleum product prices," Energy Economics, Elsevier, vol. 47(C), pages 206-214.
    3. Walls, W.D. & Rusco, Frank & Kendix, Michael, 2011. "Biofuels policy and the US market for motor fuels: Empirical analysis of ethanol splashing," Energy Policy, Elsevier, vol. 39(7), pages 3999-4006, July.
    4. Kendix, Michael & Walls, W.D., 2010. "Oil industry consolidation and refined product prices: Evidence from US wholesale gasoline terminals," Energy Policy, Elsevier, vol. 38(7), pages 3498-3507, July.
    5. Kendix, Michael & Walls, W.D., 2010. "Estimating the impact of refinery outages on petroleum product prices," Energy Economics, Elsevier, vol. 32(6), pages 1291-1298, November.
    6. Pan, Lingying & Liu, Pei & Li, Zheng, 2018. "A discussion on China's vehicle fuel policy: Based on the development route optimization of refining industry," Energy Policy, Elsevier, vol. 114(C), pages 403-412.

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    More about this item

    Keywords

    Environmental regulation; gasoline prices; Boutique motor fuels; US; air pollution;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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