Moreover, the higher prices are providing incentive to companies to get every gallon of gasoline to market they can. Refineries supplying the Midwest are running all out, and added supplies are beginning to exert downward pressure on prices. In fact, spot prices for the Chicago market started falling back on June 7, less than a week after the new gasoline was introduced, and have fallen 30 percent since. Prices at the consumer level typically follow trends in spot markets at varying intervals, depending on how much higher-priced product is still in the system and other factors. There have already been some reports of pump prices beginning to decline.
Gasoline is much like many other commodity products, although it differs in one important aspect.
When a drought reduces the corn harvest or a freeze cuts citrus production, prices go up. For gasoline, substitutes aren t readily available, so consumers feel stressed. Yet, the system ultimately works to their advantage. Over the longer term, gasoline prices have been trending downwards. Average prices in 1998 were lowest.