Commentary: Why do gas prices rise so sharply and fall so slowly? Blame gas stations and yourself

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Here’s the name for an economic phenomenon that consumers are going to be hearing a lot more in the coming weeks and months: It’s the rocket-and-feathers hypothesis, which concerns why gasoline prices rise so quickly (i.e., like a rocket) when oil prices surge and drift downward oh so slowly (like feathers) when crude prices come back to earth.The pattern is certain to become ever more obvious as oil prices continue to oscillate in response to President Trump’s Iran war and the effect of constrictions in the volume of crude moving through the Strait of Hormuz.The evidence ...

supports the common belief that retail gasoline prices respond more quickly to increases in crude oil prices than to decreases.— Borenstein et al (1997)The price of crude oil, which had settled at about $60 a barrel before Trump ratcheted up his anti-Iran rhetoric in February, has reached as high as about $113 after the conflict began, but fell below $96 during the day Wednesday as talk emerged of a possible peace deal.Meanwhile, the average price of gasoline has soared relentlessly, reaching a nationwide average Wednesday of about $4.54 per gallon of regular, according to AAA.

That’s up 12 cents from a month ago and higher by $1.38 from a year ago.So the pace at which pump prices return to those halcyon days before Trump’s saber-rattling is certain to be top of mind for consumers nationwide — and globally — if and when tensions ebb in the strait.Commentary on economics and more from a Pulitzer Prize winner.

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The economics of gasoline play a unique role f...