Gas price volatility: why pumps jump fast and drift slow in oil shocks
Economists describe the ‘rocket-and-feathers’ phenomenon: retail gasoline prices spike quickly when crude oil rises but fall slowly as crude retreats, driven by forward-looking replacement costs, slim retailer margins, and competitive dynamics at the pump. Consumer search behavior intensifies price increases but wanes as prices drop, while regional market structures—especially California—can magnify the effect. Media coverage and supply-chain constraints also play roles, and even if tensions with Iran ease, pump relief is unlikely to come promptly.
