# Gas Price - When Does it Go into Effect?
**URL:** https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144
**Category:** Factual Questions
**Created:** [December 13, 2009, 10:12pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144 "2009-12-13T22:12:41Z")
**Posts on this page:** 19
**Page:** 1
### Author:  [@aceplace57](https://boards.straightdope.com/u/aceplace57)
#### Post date: [December 13, 2009, 10:12pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/1 "2009-12-13T22:12:41Z")
You drive up to a mini-mart and the big electronic sign says - $2.90 a gal.
Has anyone seen the pump price different? Is that legal?
These days, the clerk inside can change the price at the push of a few buttons. Does that change the electronic sign and pump at the same time?
I’d swear there was a couple times that the pump price changed before I got out of the car, opened the gas cap, and turned on the pump. :dubious: Can they legally do that?
After Katrina, gas prices went totally crazy. One day the price rose an extra $1 a gal in a matter of hours. It seemed like the stations were changing prices several times a hour. Then, the next day it rose some more.
During that time, I filled my car, the wifes, and my sons without shutting off the pump. Wanted to make certain those greedy so and sos didn’t bump the price before we finished. I assume the price is locked while the pump is on? 😃 At least I hope so.
This happens after any news event. Major storm, terrorist attack, or issues in the middle east. Any excuse is all that’s needed. 18 months ago I would have never believed we’d see gas under $5 a gallon again. We better enjoy the cheap prices while they last.
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### Author:  [@Xema](https://boards.straightdope.com/u/Xema)
#### Post date: [December 13, 2009, 10:47pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/2 "2009-12-13T22:47:24Z")
> [@aceplace57](#):
>
> Has anyone seen the pump price different?
My experience has always been that the price at the pump is less than or equal to the price shown on the big sign. IOW, when prices go up, the sign changes first and when they go down, the pump changes first.
I’ve taken this to imply that it isn’t legal to charge a price higher than what’s advertised.
> [@](#):
>
> After Katrina, gas prices went totally crazy. One day the price rose an extra $1 a gal in a matter of hours. It seemed like the stations were changing prices several times a hour. Then, the next day it rose some more.
This is in fact fully rational behavior in the face of an impending shortage. Whether it’s _desirable_ behavior has been the subject of many GD (and probably Pit) threads.
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### Author:  [@aceplace57](https://boards.straightdope.com/u/aceplace57)
#### Post date: [December 13, 2009, 10:58pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/3 "2009-12-13T22:58:20Z")
I’ve wondered if there is legal limit to how often they can raise prices. Even limiting it to one change every 6 hours (4 price changes a day) would help avoid price runs.
Gas is fairly cheap now. I’d like to avoid rants in this thread. I’d Like to try and focus on the actual process of how prices are adjusted. 😉
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### Author:  [@Dog80](https://boards.straightdope.com/u/Dog80)
#### Post date: [December 13, 2009, 11:02pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/4 "2009-12-13T23:02:27Z")
Gas station owner from Greece here.
I don’t know what it is like in the US, but in Greece the refinery price is set daily by the government. This is the web page where you can see the prices:
[http://www.gge.gr/36/index.asp](http://www.gge.gr/36/index.asp)
These are the prices for Friday: [http://www.gge.gr/36/sub.asp?3792](http://www.gge.gr/36/sub.asp?3792)
For 95 RON unleaded the price is 780.1 euros per 1000 liters, or 0.7801 per liter. This doesn’t include 19% VAT, so the actual price is 0.9283 euros per liter. The final price at the pump will be anything from 5 to 20 cents over that price because of transportation costs, retailer markup, cost of various additives etc. Now this price won’t change until the next price is posted, usually at 10am next day.
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### Author:  [@Xema](https://boards.straightdope.com/u/Xema)
#### Post date: [December 13, 2009, 11:28pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/5 "2009-12-13T23:28:31Z")
> [@aceplace57](#):
>
> I’d Like to try and focus on the actual process of how prices are adjusted.
As Dog80 implies, the rational approach for anyone selling a commodity is to set the price based on what he expects the _next_ supply to cost. Note that this has no connection with what was the cost of the current supply - it can make perfect sense to ask far more or far less than the cost of what’s already paid for.
When conditions change rapidly (e.g. a hurricane is imminent, and it becomes hard to determine when the next supply will arrive, or what it will cost) you’d expect the price to be highly volatile.
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### Author:  [@Harmonious\_Discord](https://boards.straightdope.com/u/Harmonious_Discord)
#### Post date: [December 13, 2009, 11:33pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/6 "2009-12-13T23:33:53Z")
Some states to have limits to the number of price changes in a set time period. Every state has it’s own set of laws the seller has to obey. In Wisconsin you have to charge the lesser price if there is a discrepancy. This does not apply to tampering with the signs.
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### Author:  [@asterion](https://boards.straightdope.com/u/asterion)
#### Post date: [December 13, 2009, 11:38pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/7 "2009-12-13T23:38:44Z")
When I worked in a gas station with manual signs, the policy was to raise the price on the signs first and then actually raise the price at the pump when the price was going up and to lower the price at the pump first and then change the signs when going down. While there may have been a legal reason involved, it just makes sense from a business perspective. Nobody is going to complain if the price at the pump is lower than on the signs.
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### Author:  [@aceplace57](https://boards.straightdope.com/u/aceplace57)
#### Post date: [December 14, 2009, 12:07am UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/8 "2009-12-14T00:07:39Z")
> [@asterion](#):
>
> When I worked in a gas station with manual signs, the policy was to raise the price on the signs first and then actually raise the price at the pump when the price was going up and to lower the price at the pump first and then change the signs when going down. While there may have been a legal reason involved, it just makes sense from a business perspective. Nobody is going to complain if the price at the pump is lower than on the signs.
I can agree with that. 🙂 My Uncle ran a full service station starting in the 1930’s through the mid 1980’s. His first station was part of the Chevrolet auto dealership. After that station closed, he got his own location, but it was owned by Esso. They set the prices, and told him what to sell. He had to pay them to use the location. He always said his biggest money came from the service bays doing oil changes, tuneups, and selling tires.
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### Author:  [@Dog80](https://boards.straightdope.com/u/Dog80)
#### Post date: [December 14, 2009, 1:26am UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/9 "2009-12-14T01:26:58Z")
> [@Xema](#):
>
> As Dog80 implies, the rational approach for anyone selling a commodity is to set the price based on what he expects the _next_ supply to cost. Note that this has no connection with what was the cost of the current supply - it can make perfect sense to ask far more or far less than the cost of what’s already paid for.
>
> When conditions change rapidly (e.g. a hurricane is imminent, and it becomes hard to determine when the next supply will arrive, or what it will cost) you’d expect the price to be highly volatile.
Well, in Greece the government won’t let the price fluctuate too wildly, no matter what. The maximum change in any direction will be 1 to 1.5 cents per liter per day, usually a lot less. Besides, Greece buys gas with some convoluted way and price fluctuations come to us with at least a month time lag.
So in Greece it is impossible for the gas station manager to foresee whether the price will go up or down in the next day and besides the difference will be too small to have any effect.
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### Author:  [@RandomLetters](https://boards.straightdope.com/u/RandomLetters)
#### Post date: [December 14, 2009, 1:36am UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/10 "2009-12-14T01:36:51Z")
> [@Dog80](#):
>
> Gas station owner from Greece here.
>
> I don’t know what it is like in the US, but in Greece the refinery price is set daily by the government. This is the web page where you can see the prices:
> [http://www.gge.gr/36/index.asp](http://www.gge.gr/36/index.asp)
> These are the prices for Friday: [http://www.gge.gr/36/sub.asp?3792](http://www.gge.gr/36/sub.asp?3792)
> For 95 RON unleaded the price is 780.1 euros per 1000 liters, or 0.7801 per liter. This doesn’t include 19% VAT, so the actual price is 0.9283 euros per liter. The final price at the pump will be anything from 5 to 20 cents over that price because of transportation costs, retailer markup, cost of various additives etc. Now this price won’t change until the next price is posted, usually at 10am next day.
Sounds like having the government set the price doesn’t help keep it low; that price (with VAT) equals 3.51 euros per gallon, which at current exchange rates is $5.13 per gallon. In comparison, that same grade of gas would be $3 or less per gallon in the US, which includes the state & federal fuel taxes.
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### Author:  [@Dog80](https://boards.straightdope.com/u/Dog80)
#### Post date: [December 14, 2009, 2:20am UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/11 "2009-12-14T02:20:05Z")
> [@RandomLetters](#):
>
> Sounds like having the government set the price doesn’t help keep it low; that price (with VAT) equals 3.51 euros per gallon, which at current exchange rates is $5.13 per gallon. In comparison, that same grade of gas would be $3 or less per gallon in the US, which includes the state & federal fuel taxes.
Do you have a breakdown of the fuel taxes in US?
In Greece some of the taxes on fuel are a fixed amount, not a percentage on the price. Therefore, even if the refinery was giving out gas for free, the price at the pump would be something like 0.60 euros per litre. And there is talk about adding another 5 cents to the taxes these days.
I will try to post a detailed break-down of the gasoline taxes tomorrow.
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### Author:  [@Serenata67](https://boards.straightdope.com/u/Serenata67)
#### Post date: [December 14, 2009, 2:48am UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/12 "2009-12-14T02:48:47Z")
> [@Harmonious\_Discord](#):
>
> Some states to have limits to the number of price changes in a set time period. Every state has it’s own set of laws the seller has to obey. In Wisconsin you have to charge the lesser price if there is a discrepancy. This does not apply to tampering with the signs.
In WI, you can only change the price once per day. A gas station changing it more than once a day (if the gov’t finds out) can get some really stiff fines (couldn’t find out just how much, though, with a quick search). It doesn’t make it worth it.
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### Author:  [@RandomLetters](https://boards.straightdope.com/u/RandomLetters)
#### Post date: [December 14, 2009, 2:11pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/13 "2009-12-14T14:11:27Z")
The federal gas tax is 18.4 cents per gallon. State taxes vary quite a bit; [This chart list the gas tax by state.](http://www.gaspricewatch.com/usgastaxes.asp) Also note that in some states, the local levels of government (counties, towns, ect) can add on their own gas tax.
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### Author:  [@Markxxx](https://boards.straightdope.com/u/Markxxx)
#### Post date: [December 14, 2009, 3:09pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/14 "2009-12-14T15:09:57Z")
It depends on state law how often they can change. I recall when I lived in NY I saw on the news, where a NJ station changed it’s price then a leak happened so the owner, closed off the pumps in one section and changed the prices again, and the gas station was shut down because in NJ you can only change the price of gasoline once per day.
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### Author:  [@Max\_Torque](https://boards.straightdope.com/u/Max_Torque)
#### Post date: [December 14, 2009, 3:22pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/15 "2009-12-14T15:22:06Z")
Not long ago, the price changed on me before I got back in my car. I filled up at $2.34, went inside to buy a Coke, got back to my car, and the price on the pump and marquee was $2.32.
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### Author:  [@Yorikke](https://boards.straightdope.com/u/Yorikke)
#### Post date: [December 14, 2009, 5:46pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/16 "2009-12-14T17:46:41Z")
Not having read the responses -
I work at a gas station. When we get a price change, if it goes up, we change the sign first, so people will, at worst, pay less that the posted price. If it goes down, we change the pump price first, so, at worst, people will again pay less than the posted price.
Joe
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### Author:  [@Skald\_the\_Rhymer](https://boards.straightdope.com/u/Skald_the_Rhymer)
#### Post date: [December 14, 2009, 5:52pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/17 "2009-12-14T17:52:30Z")
> [@Xema](#):
>
> My experience has always been that the price at the pump is less than or equal to the price shown on the big sign. IOW, when prices go up, the sign changes first and when they go down, the pump changes first.
>
> I’ve taken this to imply that it isn’t legal to charge a price higher than what’s advertised.
I don’t know if it’s a matter of legality, but it’s certainly a matter of policy, according to a friend of mine who’s managed several gas stations. He told me that the correct procedure (mandated by corporate) for price changes was to change the pumps first if the price was going down, and to change the sign first if the price was going up. After all, nobody’s gonna complain about being charged less than they were expecting.
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### Author:  [@festiva76](https://boards.straightdope.com/u/festiva76)
#### Post date: [December 14, 2009, 9:31pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/18 "2009-12-14T21:31:16Z")
Not exactly related to price, but when the great price spike started cranking up, I took both our vehicles over to the mom-and-pop station next door, which had plastic bags covering most of the pumps signifying they were out. After filling-up my truck and bringing my wife’s truck back over to the station, while waiting in line to pre-pay, I witnessed one of the owner’s friend’s taking the bag off one of the pumps and getting gas. After confronting the owner, I was given permission to use the pump that was “out,” but was asked to cover the pump back up with the bag when I was done. The owner stated to me that he had been afraid of when his next shipment was coming in. Needless to say, I have never bought gas from there again.
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### Author:  [@Necros](https://boards.straightdope.com/u/Necros)
#### Post date: [December 14, 2009, 10:17pm UTC](https://boards.straightdope.com/t/gas-price-when-does-it-go-into-effect/521144/19 "2009-12-14T22:17:12Z")
It appears that there are laws in at least some states. From Illinois ([Illinois General Assembly - -](http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=1907&ChapAct=720%26nbsp%3BILCS%26nbsp%3B305%2F&ChapterID=53&ChapterName=CRIMINAL+OFFENSES&ActName=Gasoline+Price+Advertising+Act.))
> [@](#):
>
> (720 ILCS 305/1) (from Ch. 121 1/2, par. 861)
> Sec. 1. No person, firm or corporation owning or operating a service station shall advertise or hold out or state to the public the per gallon price of gasoline, upon any sign on the premises of such station, unless such price includes all taxes, and unless the price, as so advertised, corresponds with the price appearing on the pump from which such gasoline is dispensed. Also, the identity of the product must be included with the price in any such advertisement, holding out or statement to the public.
> (Source: P.A. 80‑992.)
and Georgia ([http://www.georgia.gov/00/article/0,2086,5426814\_39039081\_54403145,00.html](http://www.georgia.gov/00/article/0,2086,5426814_39039081_54403145,00.html))
> [@](#):
>
> Georgia law does not allow deceptive advertising of retail motor fuel prices. The total cost per gallon, including tax, must appear on the sign in regulation-sized numbers, and it is a misdemeanor to place a higher price on the gas pump or to charge a higher price than is posted on signs, billboards or in other advertising (O.C.G.A. Section 10-1-164).
My guess this is common in all states, but I can’t back that up. BTW, New Jersey appears to have a state law that forbids changing the price more than once every 24 hours. ETA: Ahh, I see **Markxxx** has already noted this.