Hi, I'm Denise, and this is your Civic Minute.
You may have noticed something about gas prices.
When Russia invaded Ukraine in 2022, prices shot up almost overnight.
But when oil markets settled back down, it took weeks, even months for prices at the
pump to follow.
Economists call this rockets and feathers, and here's why.
When crude oil prices surge, gas stations raise prices immediately.
They have to.
They need today's revenue to pay for tomorrow's delivery at the higher price.
That part is rational, but when crude prices fall, there's no urgency to lower the pump
price.
The gas in the tank was bought at the old higher price, and every day the price stays
up.
The margin is better.
Competition eventually pushes prices down, but slowly stationed by station.
So spikes are measured in days, drops are measured in weeks, and in places with fewer
gas stations and less competition, like rural Wisconsin, the feather falls even slower.
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