We’ve all seen it: stations which are very near each other: next door, across the street… their gas is always within a penny or two of each other. In the case of an intersection with Brand X vs one of the big companies, maybe a nickel or more. One place raises its prices, the other raises its prices to a penny less.
BUT - near us, there’s an intersection with 4 stations. 2 big-name, one brand X, one brand Y. X and Y are usually a few cents cheaper.
The other day though, I drove by and brand X was about 30 cents more than the others per their sign. Maybe they hadn’t changed the sign in a while, but I went to brand Y anyway. Later in the day, prices had jumped at all 4 - about 10 cents a gallon at all but X. X was a whopping 50 cents a gallon more than the other 3. Since it had changed since earlier in the day, clearly the “forgot to change it” explanation didn’t work.
There used to be such a juxtaposition a few miles away, but it was only 2 stations (and I think it was the bigger-name place that was substantially more, and the lesser-known place was not all that unknown). The big-name place was always about 30 cents more per gallon. It has subsequently gone under.
Speculations and WAGs please: What on earth would motivate a gas station to charge that much more than their competitor, 50 feet away? Something shady going on like money laundering?
With the older place (that has now closed), one could argue that “big oil company” gas is better quality (if not 30 cents a gallon better). But why would Brand X think they could charge more?
(Oh, and for NoVA dopers, this is on Franconia Road east of Fleet Drive).
Is there perhaps a fleet of cars/trucks close to that station? If the fleet uses a nationwide credit card for fuel and that station is the closest one of that brand, that could be a reason.
I don’t know about your area, but in Wisconsin we have a minimum markup law. That gas station with the higher price may have paid more for their gas as well and didn’t really have a choice in the matter.
The station owners are told what to price the gas at by the corporate guys. Just today I heard an owner on the radio talking about why prices are so high at the moment when oil is under 100 bucks. And that was her answer. She has very little latitude as a station owner to price the fuel. She gets her marching orders over the phone.
I don’t know about you guys, but gas prices have dropped significantly in my area. It’s about 50 cents cheaper per gallon now than it was about 2 months ago.
This is the only explanation that makes sense. though I don’t think there’s anything nearby that would have a fleet of cars.
Zone pricing would make sense if other stations in our general area charge similar amounts but clearly they don’t.
It’s certainly possible they paid more for the gas (per the minimum markup comment), though that much more? Unless they sold all their more-cheaply-purchased gas faster than the other 3 on the same corner, and had to buy more when the price increased?
It’s hard to imagine the corporate guys telling the local station to charge 50 cents more per gallon, as that would pretty much guarantee they wouldn’t sell anything. The other 3 stations with cheaper gas are quite literally visible from the pumps of the pricey one. Of course, who knows what corporate bean-counters do and what motivates them
I imagine there’s some perfectly boring explanation, probably one of the ideas you guys have suggested. Mine is more entertaining though
Is the station that is out-of-whack a chain, or a standalone mini-mart plus gas type joint? Some mom-and-pops will have to price their gas literally based on how much the truckload costs. I work for a large gas station chain and VERY large gas supplier. I have been told that we price our retail gas more based on longer-term prices. That is, we can lose a bit on this truckload, but eventually come out OK. If the mom-and-pop has to pay rack price on 10,000 gallons of fuel, they may not be able to absorb a 15-cent loss per gallon just to compete. So they charge what they have to to break even on that load.
Though 50 cents more than the station across the street is highly unusual.
This may be out of date news, but about 15 years ago I knew two guys who owned a name brand gasoline full service station. Because they actually owned the station and weren’t leasing it from the company, they were forced to pay a higher price for their gasoline than other stations might have to pay. As I recall, they made most of their money from repairs; locals bought their gasoline there because it was “convenient” and it was a fairly affluent area where price wasn’t a major problem. I went out of my way to go there because they were excellent servicemen, but they knew I would not buy gasoline there and they didn’t blame me one bit. I actually met them when they were working for a station that was nearer my home, and followed them when they left to open their own place. Good guys, they were.
Michigan went from 3.60s to over 4 .20 before we got destroyed by the hurricane. Oh wait we did not get hit. But we still pay 60 cents more.
I live 2 blocks off a big highway with lots of gas stations. Back in the old days when they competed gas stations fought to be the cheapest. Now they go up and down a couple times a day. The close station may be 2 cents cheape rtoday and the one 2 blocks down will be cheaper tomorrow. No real reason except the compant calls and says change.
I refer to that as “distributing the memo”. Also , you notice that all the gas stations go up to 4.20 for regular for example, but the memo does not tell them what price to set the other grades at. You end up with regular & mid-grade at the same price. Then everything bounces around for a while as one gas station gets greedy & undercuts by a penny or so, floating the price back down until the next price memo goes out.
If only the Michigan governor had the backbone of the Florida governor. I watched a news report where in Florida, the gas distributors are being required to show where their costs went up in proportion to the price spike after Ike came in. If they can’t they will be hit for some penalties for price gouging. In Michigan, I see no such process happening.
