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EMD-80-77 1 (1980-05-22)

handle is hein.gao/gaobabapc0001 and id is 1 raw text is: RELEASED RESTRICTED - Not to be released outside the General Accounting Office except oirthe basis of specific approval by the Office of Congressional Relations. UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 ENERGY AND MINERALS DIVISION MAY 22, 1980 B-198754 The Honorable Stanley N. Lundine House of Representatives Dear Mr. Lundine: 112396 Subject: LGasoline Pricing Disparities Between Adjacent Areas of New York and Pennsylvanga (EMD-80-77) Your letters dated September 21, 1979, and February 11, 1980, requested that we determine why retail gasoline prices in the Southern Tier areas of New York are higher than in northwestern Pennsylvania even though a substantial amount of the gasoline requirements of both areas is furnished by the same refinery--United Refining Company in Warren, Pennsylvania. Retail gasoline prices can vary for a number of reasons including differences in wholesale prices, retail margins, and gasoline taxes. We found, at the end of January 1980, that New York State's gasoline sales tax accounted for the slightly higher gasoline prices at United's New York retail stations. We also found wholesale pricing differences between United and other oil companies serving the two counties even though a substantial amount of the gasoline came from the United refinery. This is because United supplies gasoline to other companies under an exchange system whereby the gasoline was priced by the receiving oil com- pany in accordance with its overall pricing structure. Consequently, other companies could charge either higher or lower prices than United's. Our examination of United's gasoline prices in the Southern Tier areas of New York and northwestern Pennsyl- vania was limited to Chautauqua County, New York, and Warren County, Pennsylvania. We selected these two coun- ties because of complaints from Chautauqua County residents concerning apparent gasoline pricing disparities and be- cause we believe these two adjacent counties to be repre- sentative of United's market areas. (004296)

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