The fact that the price of gasoline is nearly the same in adjacent gas stations and varies by regions so that some retail stations near oil refineries have higher prices than stations distant from the refineries suggests an oligopoly, doesn’t it?
The answer is "no!" The consistency of price suggests that gasoline is a commodity. The price of #1 wheat and #2 corn is the same everywhere, which reflects the fact that wheat and corn are commodities. If there were a retail gasoline oligopoly you would see the same gas station names that we had fifteen years ago: Texaco, Union, Mobil, Citgo and Exxon… but they are all long gone. Gasoline is a commodity and gas retailing is a precarious business.
The regional variation in price is a reflection of demand differences. Transportation costs for gasoline are negligible but the price variation correlates exactly with the income level of the region. Demand is the determinant of regional pricing.
The connection between the price of retail gasoline and wholesale barrel of oil is parallel but not very close. The intervening factor is refining which is a narrow bottleneck, with a limited number of plants, with modest profits, horrific capital requirements, intense government regulation and a genuine nimby problem.