But a month ago, US average was higher. US prices are down about 22 cents in the past couple of months, for reasons that do not affect Mexican prices. Are you quoting the Pemex price nationwide, or at the border premium? Keep in mind that US border prices in Mexico are higher than anywhere else, because the US border is considered a “remote” region (like Alaska), where goods of Mexican origin need to be shipped across a thousand kilometers of desert to supply marketers.
The Mexican motor fuels tax has recently risen sharply. While the tax in the US remains the same, on a per gallon basis, not a percentage of gross sales. City-owned gas retailers in the US still have to pay the tax, as does Pemex…
When I was driving in Canada, all of the gas stations had the same price, which I liked because I don’t really like driving around scouting gas stations for the best price.
That would seems to suggest that, if the municipal station did exert pressure to lower prices, it was more in the range of a nickel than the 20¢ the NPR article implies. That’s ignoring the fact that gas prices regularly fluctuate a few pennies regardless so we don’t know if the municipal station was the primary cause here.
Are your gas prices really THAT disparate? Our highest and lowest gas prices in the area usually differ between 5 and 10 cents. Even today, when I think the prices are changing, it’s 12 cents.
For example, looking at Gas Buddy’s map on my phone, today’s prices seem to cluster around 3.17 a gallon on the low end, or 3.29 on the high end in the north and northeast Dallas areas. There doesn’t seem to be much rhyme or reason to it geographically- all I can think of is that I’m seeing a price change, and some stations haven’t caught up yet.
The reason they are the same price is because they are rounded to the nearest 0.9 cents per liter, which is about four cents per gallon, which is the usual spread between different gas stations in the US. In most cases, price variations in the US are within a range of one cent per liter.
If the US price ranges from 3.319 to 3.349, those both round off in liters to the same number of cents per liter, so both stations will show the same price. You won’t have one station at .759 and another at .753 per liter, they will all be rounded to a last-digit 9.
That is not a “fact” that has any validity. In the past year, the US average price has ranged from 3.17 to 3.67, which is a 60-cent spread, so basing an argument on a one-day example with a 5-cent differential against the “average US price” sheds absolutely no light on a “good argument”.
And I’m still waiting for the poster to tell me if that Pemex price is Frontera Norte or Resto del Pais. Nor, has tax been taken into account.
It is for the week of Aug 2nd, 2014, and the price in Mexico is for all of Mexico at $3.74 a gallon, compared to the national average in the US during the same time frame of $3.69.
Your point of gas in Mexico being hugely below US prices is busted.
My source shows that during that week, the average US price fell from 3.50 to 3.47. You do not bust anything just by finding different sources, unless you can prove that yours are better. Average US prices have variable octane ratings and ethanol contents.
Historically, Pemex prices at the pump have been lower than US prices for decades. Whether they are this week or this month is of very little relevance to that overall fact when comparing prices of a volatile commodity. Gas prices in Mexico have risen over 8% in a year, mostly due to a bigger tax bite…
But the taxpayer subsidy of the USPS was phased out in 1983, so his/her memory was not totally off, even if it was also not exactly “privatized”. Really, the USPS is in an especially difficult position, because they are required to pay their own way through postage and other fees, plus selling souvenirs and various paraphenalia. Yet they still have to keep operating post offices in various far-flung podunks and delivering mail to remote addresses for the same price as sending something to your next-door neighbor.
Yet somehow all these other gas stations are staying in business, as people have pointed out.
And as far as I’m concerned, the government doesn’t have to justify any such enterprise. If their distribution of cheese, for instance, causes the demand for cheese in the supermarket to slacken and prices to drop, tough shit.
It’s not like there aren’t already tons of ways the government “interferes” with the free market in pricing: Michael Pollan has extensively demonstrated how government policy keeps corn prices artificially low while keeping supply high, for instance.
In my town, I don’t notice a lot of disparity. But recently our family was travelling in Columbia, Missouri, and getting low on gas (“on E” in fact). We pulled into the only station we saw anywhere near us, and despite it being a big station with several rows of pumps, they were all full. We actually had to pull off to the side, awkwardly, to wait for a spot to open up, something I don’t remember ever having to do before. Finally we got gas and as we pulled away from the station, I noticed the sign for the first time. I don’t remember the exact price, but it was about forty cents lower than my mental idea of the then-current price; and that held up when I saw signs elsewhere in town later that day. That kind of explained its popularity, even though we just randomly ended up there.
Thank you, SlackerInc, for detailing more clearly what I was trying to express: That the poor performance of the USPS was due not because it’s a government entity, but because its funding was stopped but its oversight was not. Either cut it free and quit meddling or take control and support it. [I think my teen-aged step-daughter said something like that to me once…:o]
And, since there has still been little additional detail, I’ll clarify my observation: jtur88 claimed that fuel prices were kept higher in Mexico to keep Americans from going down to exploit the lower prices. Omar’s brief statement that the price of Mexican petrol at the border was about 5 cents higher than the US Gasoline prices in the area seemed to support the claim – yeah, Mexico sets their price 5 cents higher so it’s not worthwhile* for Americans to drive down, fill up, and cross back again. So I was encouraging further elaboration of the statement/point.
–G!
[The Wanderer is male, by the way.]
*Even if it was 5 to 10 cents per gallon less, the resulting savings would probably be burned up (literally) while waiting in those century-long border checkpoint lines. :smack:
Mexican here. Gasoline is far from cheap here and hasn’t been for quite a few years. Complaints about availability may now be few, complaints about price and service are very common. The gas stations here are infamous for pumping less than liter, liters. The cost of gasoline is a very common complaint. Its cost for us, when you take into consideration our average earnings, makes it far more expensive to operate a vehicle than it is for Americans.
There are 2 different octanes available, Magna and Premium. The price for Magna, the lower octane gasoline, has been the same along the border and the interior for a number of years. The price difference for Premium, the higher octane, has been gradually evened out over the last 2 years or so.
This would be more clear if we knew the average price in Somerset vs. average regional price before and after the town gas station.
It’s not the owners who make the money, it’s the refiner/distributor. They set the price, and the owner gets a small margin above that. If the distributor is setting a price in Somerset that is higher than the regional average, a new competitor that is not burdened by their pricing scheme can make a real change.
If the gas is sold at (or near) cost, who pays for the infrastructure (pumps, lights, buildings, paving)? How about the uilities (electricity, water, etc)? Then there is the matter of salaries and benefits for the attendants, I supppose we’ll want those. From where does it come? How about ongoing maintenance?
As shown in several posts above, gasoline is not generally a high profit item even in the free market. That’s why it’s very rare to see a free market station that sells fuel only. The profit is made in the store or service bay. In order to sell gas cheaper than the competition it would almost certainly have to be subsidised. That means that people in that community who don’t even own a car will have to help pay for everyone else’s gasoline. How’s that for fair?
