Strategic Petroleum Reserve: Possible Effects on Gasoline Prices of Selected Fill Policies [April 19, 2004] [open pdf - 50KB]
"This report examines the factors that are currently influencing crude oil and gasoline prices, and reviews the extent to which prices might be correlated with SPR [Strategic Petroleum Reserve] fill policy. If RIK [royalty-in-kind] oil was released to the market, gasoline prices might be affected. Since crude oil is a raw material in the production of gasoline, a reduction in the price of oil might pass through to the price of gasoline. To the extent that the capacity to refine additional barrels of crude directed to the market exists, and the diverted RIK oil is not offset by reduced crude oil imports, consumers might benefit. However, the amount of RIK oil, relative to the total market, is small, and when coupled with other market dynamics, the effect of changes in SPR fill policy on crude and product prices could be only minimal. Conditions in the gasoline market, including strong demand, high refinery capacity utilization rates, fragmented regional gasoline specifications, scarce, high cost imports as well as low current inventory levels point to the continuation of high gasoline prices even if oil prices decline somewhat. Although the price of oil influences, and is a component of, the price of gasoline, a complex interaction of many factors determines price."
CRS Report for Congress, RL32358