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One of the factors discussed at length there was that of wide variance in fuel standards across the country, which creates varying fuel reformulation mixtures for different regions of the country. These different fuel standards can thus increase the variability of gasoline prices by making it more difficult to redirect gasoline from one part of the country to another to in response topshelfpussy to local supply and demand shocks. Thus, these differences in local environmental regulations can lead to higher local gas prices topshelfpussy by reducing market flexibility. Andrew Samwick of Vox Baby points to this nifty map supplied by economist James Hamilton that shows the many different standards in place across the country. Each of these subregions requires a different gasoline blend from each of the others, thereby chopping up the country into dozens of isolated mini-markets.
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