Why is Gasoline so Expensive in Buffalo?

October 21, 2008

At the Buffalo Gas Prices website you’ll find this graph (or one very similar to it):

It is difficult to understand why, one year ago, Western New York gas prices were roughly 5 cents per gallon above the national average, yet today they are 47 cents above the national average.

If you’re from Buffalo, doesn’t this just stick in your craw?  I dug around trying to understand the price differentials and came up with a number of unsubstantiated answers, all speculative:

  • Supply and demand factors
  • Lack of local refineries
  • Distance from pipelines and refineries
  • State formulation requirements
  • State taxes
  • County taxes
  • Local greed

I thought that reformulation was an issue, as New York is one of those states that 1) must use reformulated gas to reduce pollution in its major urban center; 2) forbids use of MTBE, leaving only ethanol as the oxygenator of choice and potentially raising the cost of gas.  But that doesn’t explain why Western New York has the most expensive gasoline in New York State.  New York City prices (as of 10/20) averaged only $2.94 per gallon.  The Upstate average is $3.20 per gallon.  And here we are at $3.31 per gallon.  None of the factors above lead to a rationalization of the huge price differential that we’re paying at our end of the state.

Of course, there is one plausible explanation as to why the oil companies charge us more than in other areas:  Because they can.

And no amount of writing to my State Assemblyman will change that.


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