Gasoline Zone Pricing: Good Management or a Politician's Opportunity for Good Press? Working Paper Series--01-02

During 1999 and again in 2000, the retail gasoline markets and the crude oil market saw several severe price spikes. The resulting public furor stimulated political debate and investigation at several levels. This paper focuses attention on the practice of zone pricing or price discrimination. First a theoretical discussion is provided. This is followed by a finding concerning the proposed policies against this practice. In addition, the political discussion leads to a new concept of price herein coined as the "litigation prevention price.