# How does this gas station do it? **URL:** \ **Category:** Factual Questions\ **Created:** [December 14, 2015, 6:29pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433 "2015-12-14T18:29:09Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Urbanredneck](https://avatars.discourse-cdn.com/v4/letter/u/ea5d25/32.png) [@Urbanredneck](https://boards.straightdope.com/u/Urbanredneck)\ **Post date:** [December 15, 2015, 5:55am UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/21 "2015-12-15T05:55:50Z")
I knew a guy who started a gas station and he was about 5 cents cheaper than all the other stations in town. Why? The others had a little agreement that they would all charge about the same and not get into a price war. So gas prices were artificially high. Until the new guy came on the block. So it could just be the other stations have been artificially higher than needed. ---
**Author:** ![Senegoid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senegoid/32/6606_2.png) [@Senegoid](https://boards.straightdope.com/u/Senegoid)\ **Post date:** [December 15, 2015, 6:06am UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/22 "2015-12-15T06:06:47Z")
The new guy on the block with the 5-cent cheaper gas wouldn’t necessarily put all the other price-gougers out of business. I’ve seen major-brand gas stations with gas as much as 10 cents cheaper than another major-brand right across the street, and cars still going into both stations to get gas. Go figure. I’ve been getting my gas from one major brand for about 20 years now, that is consistently cheaper than all the other major brands around (even if only by one cent, but usually more like 5 to 10 cents cheaper). I figure, if _everybody_ would just do this (and I wish everyone would), then the stations would be forced to race to the bottom with their prices. ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [December 15, 2015, 9:37am UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/23 "2015-12-15T09:37:53Z")
> [@Senegoid](#): > > I’ve seen major-brand gas stations with gas as much as 10 cents cheaper than another major-brand right across the street, and cars still going into both stations to get gas. Go figure. This happens here too. My understanding is that the more expensive ones often depend on contract customers who pay at the end of the month. There must also be some brand loyalty too, or else why would Shell, BP et al spend money on advertising. ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [December 15, 2015, 10:01am UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/24 "2015-12-15T10:01:58Z")
One way some petrol stations can buy their fuel more cheaply is to buy ‘bin ends’. That is, if the fuel tanker has any fuel left after its normal round, they buy what’s left at a reduced rate. ---
**Author:** ![Frank](https://avatars.discourse-cdn.com/v4/letter/f/3d9bf3/32.png) [@Frank](https://boards.straightdope.com/u/Frank)\ **Post date:** [December 15, 2015, 10:59am UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/25 "2015-12-15T10:59:33Z")
> [@Senegoid](#): > > I’ve seen major-brand gas stations with gas as much as 10 cents cheaper than another major-brand right across the street, and cars still going into both stations to get gas. Go figure. The $1.50 difference on a fill-up is not worth going through the time and trouble of getting to a station that is on the wrong side of the street. I’ll just stop at the one that’s in a direct line with my trip. (This applies to city driving; I’d likely act differently getting gas in a less-trafficked area without stoplights.) ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [December 15, 2015, 12:21pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/26 "2015-12-15T12:21:49Z")
Poking around online, I don’t see a breakdown that shows station costs. “Distribution and marketing” (~10% of cost) might include parent-company costs? I’m not sure how the business models work. > [@Frank](#): > > The $1.50 difference on a fill-up is not worth going through the time and trouble of getting to a station that is on the wrong side of the street. I’ll just stop at the one that’s in a direct line with my trip. (This applies to city driving; I’d likely act differently getting gas in a less-trafficked area without stoplights.) That’s it. Due to pretty regular travel, my typical fill is only 10 gallons, so we’re talking a $1. I estimate the marginal value of my time at $1/min, so convenience is usually going to win out over price. ---
**Author:** ![Urbanredneck](https://avatars.discourse-cdn.com/v4/letter/u/ea5d25/32.png) [@Urbanredneck](https://boards.straightdope.com/u/Urbanredneck)\ **Post date:** [December 15, 2015, 12:50pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/27 "2015-12-15T12:50:21Z")
I agree. I’m not going to make an awkward left turn to save a few cents. I stop at the station on the way. Now the one thing I will NOT do is stop at the stations who’s side business is booze and porn. Those nasty places do not get my business. ---
**Author:** ![billfish678](https://avatars.discourse-cdn.com/v4/letter/b/7bcc69/32.png) [@billfish678](https://boards.straightdope.com/u/billfish678)\ **Post date:** [December 15, 2015, 2:27pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/28 "2015-12-15T14:27:15Z")
> [@gigi](#): > > The OP said full service so depending how busy it is, he would have to have some employees. And people…they’re the worst. Yes, but all those people have to do is ring up for gas and do a few trivial tasks to the car. Unlike a convience store model. Your employees have be much more skilled and there is lots of STUFF somebody has to deal with (and that often probably the owner). ---
**Author:** ![Bear\_Nenno](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bear_nenno/32/3358_2.png) [@Bear\_Nenno](https://boards.straightdope.com/u/Bear_Nenno)\ **Post date:** [December 15, 2015, 2:50pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/29 "2015-12-15T14:50:37Z")
> [@Frank](#): > > The $1.50 difference on a fill-up is not worth going through the time and trouble of getting to a station that is on the wrong side of the street. I’ll just stop at the one that’s in a direct line with my trip. (This applies to city driving; I’d likely act differently getting gas in a less-trafficked area without stoplights.) Agree. I’ve never looked at or even considered the price of gas in my decision to stop at a particular place. The price of gas does not vary enough from station to station to even bother. ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [December 15, 2015, 3:05pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/30 "2015-12-15T15:05:02Z")
> [@dolphinboy](#): > > By having the lowest price perhaps he sells a lot more gas than other places, which means he can get a better price on his gas Huh? ---
**Author:** ![lance\_strongarm](https://avatars.discourse-cdn.com/v4/letter/l/87869e/32.png) [@lance\_strongarm](https://boards.straightdope.com/u/lance_strongarm)\ **Post date:** [December 15, 2015, 3:06pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/31 "2015-12-15T15:06:12Z")
> [@Urbanredneck](#): > > Now the one thing I will NOT do is stop at the stations who’s side business is booze and porn. Those nasty places do not get my business. Me neither - the smell of gas disgusts me when I’m buying booze and porn, so I go straight to the booze and porn shops. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [December 15, 2015, 3:38pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/32 "2015-12-15T15:38:37Z")
Independent gas stations usually buy on the spot market and chains usually have a contract with a provider. Since the price of gas has been in free fall recently, it may be that the spot price is significantly lower than the contracted price where you are. ---
**Author:** ![Hermitian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hermitian/32/470_2.png) [@Hermitian](https://boards.straightdope.com/u/Hermitian)\ **Post date:** [December 15, 2015, 4:07pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/33 "2015-12-15T16:07:06Z")
> [@Bear\_Nenno](#): > > Agree. I’ve never looked at or even considered the price of gas in my decision to stop at a particular place. The price of gas does not vary enough from station to station to even bother. Wow. I would put this near the top of my list of most interesting things I have ever heard. Price is pretty much the only thing I do consider (along with location). I might not go out of my way for a small difference in price, but I tend to know which stations along my daily commute are cheapest and I visit those. I know of two stations that are 3/4 of a mile apart and their price varies by 44 cents/gal (I just confirmed this on gasbuddy)! ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [December 15, 2015, 4:10pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/34 "2015-12-15T16:10:51Z")
> [@lance\_strongarm](#): > > > [@dolphinboy](#): > > > > By having the lowest price perhaps he sells a lot more gas than other places, which means he can get a better price on his gas … > > Huh? \*\*dolphinboy \*\*probably means that by selling more volume of gas the station owner can obtain a better / lower wholesale price from his supplier. Which in turn enables him to sell his lower-costing product at a lower retail price and still make money. A virtuous circle. A lot of why Wal-Mart has low selling prices is they’re able to buy those products more cheaply than other retailers. I doubt that’s truly the reason for the situation in the OP, but IMO there’s no mystery in what \*\*dolphinboy \*\*was trying to say. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [December 15, 2015, 4:19pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/35 "2015-12-15T16:19:22Z")
> [@Hermitian](#): > > Wow. I would put this near the top of my list of most interesting things I have ever heard. > > Price is pretty much the only thing I do consider (along with location). I might not go out of my way for a small difference in price, but I tend to know which stations along my daily commute are cheapest and I visit those. > > I know of two stations that are 3/4 of a mile apart and their price varies by 44 cents/gal (I just confirmed this on gasbuddy)! I don’t pay any attention to prices either; it isn’t worth messing with. See also [xkcd: Working](http://xkcd.com/951/) for a very smart guy’s take on this. IME this depends a lot on where you live. The biggest spread I’ve seen around here between name brands is 5 cents. And between name brands and no-names it’s typically about 15 cents. This is in established suburbia with gas stations on most major grid street corners. There \*is \*one place I often drive by that is $1.80/gal :eek: more than anywhere else. It’s also just outside the entrance to the major airport rental car return area. Two blocks away on the same main drag the prices are totally typical of everywhere else. ---
**Author:** ![ThelmaLou](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thelmalou/32/390_2.png) [@ThelmaLou](https://boards.straightdope.com/u/ThelmaLou)\ **Post date:** [December 15, 2015, 6:15pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/36 "2015-12-15T18:15:20Z")
[An earlier thread of mine on the issue of cheap gas.](http://boards.straightdope.com/sdmb/showthread.php?t=704289) ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [December 15, 2015, 6:49pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/37 "2015-12-15T18:49:44Z")
> [@Bear\_Nenno](#): > > Agree. I’ve never looked at or even considered the price of gas in my decision to stop at a particular place. The price of gas does not vary enough from station to station to even bother. I do consider the price, although I don’t go out of my way at all to get the lowest one. Rather, what I do is consider which gas stations are nearby (the same ones are always the lowest priced ones in the area) when I need to fill up, and stop at that one on the way to/from work or during my lunch hour, IF I happen to be running errands in that direction. I mean depending on the exact route I take (I usually let Waze navigate), I may pass as many as 5 or 6 gas stations. If I know that one is always selling cheap gas, there’s no reason not to stop at that one instead of one of the higher-priced ones. I agree that it’s stupid to go drive 10 miles to save $0.05/gallon though. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [December 15, 2015, 7:05pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/38 "2015-12-15T19:05:12Z")
> [@Cold\_Dish](#): > > Money laundering? No, that’s not how it works. ---
**Author:** ![Drunky\_Smurf](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/drunky_smurf/32/449_2.png) [@Drunky\_Smurf](https://boards.straightdope.com/u/Drunky_Smurf)\ **Post date:** [December 15, 2015, 7:13pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/39 "2015-12-15T19:13:07Z")
My guess is money laundering. ---
**Author:** ![Claverhouse](https://avatars.discourse-cdn.com/v4/letter/c/13edae/32.png) [@Claverhouse](https://boards.straightdope.com/u/Claverhouse)\ **Post date:** [December 15, 2015, 7:23pm UTC](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433/40 "2015-12-15T19:23:08Z")
> [@DrDeth](#): > > > [@Cold Dish](#): > > > > Money laundering? > > No, that’s not how it works. Petrol laundering ? [Previous page](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433.md?page=1) [Next page](https://boards.straightdope.com/t/how-does-this-gas-station-do-it/740433.md?page=3)