Midwest Gasoline Prices: A Review of Recent Market Developments

This report provides background information regarding the especially high gasoline prices in the upper Midwest during the late spring and early summer of 2000. While the Federal Trade Commission is investigating the possibility of collusion, several identifiable factors have contributed to this localized situation. Contributors to the higher prices appear to be problems at two pipelines supplying the area with gasoline, the use of ethanol-only reformulated gasoline in Chicago and Milwaukee, and the high price and low supply of crude oil. The crude oil situation has uniform nationwide impact. Wholesale prices in the Chicago spot market began to decline during the week of June 19 and have fallen by 40 cents per gallon at this writing. This report will be updated as events warran