Bill Allowing Cheaper Blends Of Gasoline Passes Arizona Senate
Editors Note: If you travel much by car, you likely have noticed that gasoline is often cheaper in rural communities, in New Mexico, and Colorado. That is because “special blends” are required for urban areas in Arizona. This is strange because Denver is a large metropolitan area situated in a bowl surrounded by mountains, and subject to air pollution just like Phoenix. So is Salt Lake City. Yet, their gasoline is often a dollar cheaper per gallon. In markets, there is the function of arbitrage. Buy in a cheaper market and sell in a more expensive market and thereby equilibrate prices. There may be freight costs in the equation as well. You know markets are not functioning when arbitrage is not permitted. Often, this is caused by a lack of fungibility, that is to say, gas is “blended” differently in one locale than in another. Whatever the merits of the “blending” process, it should be evident that standardization will end the fungibility issue and allow arbitrage to function in markets. There is no rational reason for gasoline in Phoenix to be so much more expensive than elsewhere. Gouging the middle and lower classes on fuel should be left to California where is it a practiced art.
A bill aimed at lowering gas prices by allowing more types of gasoline to be sold in Arizona passed the Arizona State Senate on Thursday.
In Maricopa County, environmental regulations allow for only two blends of gas to be sold to consumers, one winter blend and one summer blend, referred to as Cleaner Burning Gasoline, according to a news release.
Senate Bill 1064 passed along party lines, but Democratic Sen. Catherine Miranda voted in favor, making the final tally 17-11-2.
“From gasoline to groceries, electricity, housing, and every other basic necessity, Arizonans are paying thousands of dollars more per year to maintain the same quality of life they had just before Joe Biden took office. While we can’t prevent his implementation of the reckless policies that are hurting hardworking families, senior citizens, and young adults, we can help Arizonans keep more of their hard-earned dollars through commonsense solutions like SB 1064,” Sen. Justine Wadsack said in a statement following the bill’s passage.
“I’m hopeful this legislation will be signed into law because it is the right move to make to improve the lives of our citizens,” she continued.
Democratic Sen. Priya Sundareshan raised concerns about the effectiveness of lowering costs, as well as concerns about air quality regulation compliance.
“To try to pass a statute that mandates the allowance of these blends without having conducted that testing and modeling ahead of time is putting a cart before the horse,” she said in the explanation of her vote against the bill.
Gas prices may be lower in the winter than in the summer because of the blend used, as well as various other factors impacting energy costs. In 2023, gas prices went upwards of $5 in some parts of Arizona, according to the Arizona Republic.
The Center Square reported in December that the legislation would also give the Senate President and House Speaker the ability to apply for a waiver with the Environmental Protection Agency when refineries are circumstantially requesting fewer regulations. In June, an effort by some refineries to get more blends allowed by the EPA failed, Arizona’s Family reported.
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This article was published by The Center Square and is reproduced with permission.
Image Credit: Wikimedia Commons
