On 1 January 2004, the US gasoline market faces further fragmentation as four states ban the use of the additive methyl tertiary butyl ether (MTBE) in gasoline. The changes in specification have already caused price spreads to widen in the US market and further volatility, particularly for reformulated gasoline (RFG), is widely predicted next year. The change is expected to lead to more local price spikes, especially during the summer, higher refining costs and a rise in imports. The incremental costs of the MTBE ban in California are currently estimated at around 6¢ - 8¢/ USG, and the EIA currently estimates that the New York/Connecticut ban could raise average retail prices by 5¢/USG...
