Not far from my girlfriend’s house is a street intersection with three corners occupied by gas stations. Two of the stations usually charge a reasonable price, while one will be 25 to 30 cents a gallon higher. This isn’t near an airport rental car return area or isolated Interstate exit; it’s in the suburbs of a major metropolitan area. Right now, the stations on the other corners are $3.85 or so, while the oddball Shell is at $4.20.
In most cities I’ve lived in the US, there was always one or two oddball gas stations that charged far more than competitors in town, even though they arent in a spot where it’s advantageous to do so (airport rental car return, etc).
My question to Dopers: what’s the deal with these stations?
That station is probably a full-service garage, more interested in mechanical work than in the very low-margin business of selling gas. They will sell gas if you insist, but they set the price high enough that they won’t have to very often.
I always assumed the oddball ones were independent owners. The two near me that charge higher than average prices are certainly unique. If they’re independent, they likely have a harder time getting good prices on gas than larger chains.
3.8l in a US gal, so that’s about $10 a gal, but don’t panic at least $5/gal is going to HM Treasury, so it won’t be wasted.
Several posters have mentioned the station could be a front, a front for what?
One other consideration is that station maybe on the corner which has the heaviest traffic going past, thus can capture a fair bit of business from customers who don’t want to make several turns to save a few bucks.
Some people like me have no idea about comparison shopping for gas. I don’t even notice and pick my gas stations almost exclusively by the quality of their mini-mart and bathrooms. I couldn’t tell you the rate I paid this morning where I filled up let alone the 12 others I passed on the way to work. Maybe they just cater to oblivious people like me.
And it’s only fair to add that, according to what I’ve heard from some British and European Dopers here, at least some of you need your cars as much as we do here. You don’t all live a couple of blocks from a Tube station.
Odd that the OP noticed Shell. I have also. A couple of blocks from me is a Shell location that just re-opened after a year of remodeling and refitting. They now sell hydrogen, and are part of a “Hydrogen Highway” that’s supposed to run all the way from Mexico to Canada through California, Oregon, and Washington. It was an initiative of the Governators, and one that I have to give him some kudos for. At any rate, there will be enough hydrogen stations along the route that you can keep a car filled along that route.
Maybe Shell was putting some money into that, and tried to pass it along to retail consumers. Given traffic conditions along this stretch of Santa Monica Boulevard, during large portions of the day, you would not go to a station across the street to save .20 per gallon. It wouldn’t be worth the hassle.
There is one of those stations near me, and it is a U-Haul rental station too. I always assumed that their main purpose in jacking up the fuel price was so desperate people returning U-Haul trucks would pay 20-30 cents more than they had to down the street just to return the truck with a full tank. The only thing I could think of, because there are two other stations in eyeshot with prices at least 5% less.
With all due respect, the issue in question isn’t OMG WHY IS GAS SO EXPENSIVE.
I too have a Shell station near me that is easily 30-40 cents per gallon more than anything in a 1 mile radius (which includes at least 10 other gas stations). I’m not 100% certain it has a car wash, but there is another Shell station about 3 blocks away, and it DOES have a car wash and isn’t so expensive.
I’ve always wondered if this particular station gets most of its business from people with corporate gas cards or something. Because I can’t imagine too many people would be willing to pay almost $5 a gallon when a block away they can pay $4.50.
How competitive is the wholesale gasoline market? I’m wondering how much variation there is in the cost to individual gas stations.
Many gas stations sell gas at, or a little below, cost. If a station owner insisted on making a reasonable profit on the gas, his prices might look high in comparison to the competition.
If your a regulator charged with making sure that there is no price fixing , zone pricing , and that the gas stations are really run by independent business men, then that odd ball gas station would be part of the other end of the bell curve for prices in your area. Im guessing that if you were to canvas the entire area , you would probably find one thats just a few cents below the $3.85.
There’s a Shell station near me that is always high as well. There’s also a Sunoco that’s slightly higher than others. Both of those stations have garages where the cheaper stations do not.
Money laundering, selling gasoline results in a good deal of cash.
I have a suspicion a gas station near me was just this. Their gas price was a good 10 cents less than everyone else (good for me). What struck me as odd was that the meager inventory in the store was dusty, even the drinks in the fridges had a light layer of dust on them.
Now they are boarded up, chain link fence around the islands, and a big “closed” sign on the window.
Either they were a front, or had terrible business acumen.
There’s a possibility that these stations are operated by individuals who lease the business from the gasoline company. I have seen an article in the Miami alternative paper (several years ago) about the Shells and Exxons raising wholesale gas prices to these operators in an effort to drive them out so they can use the land for more profitable ventures. The individual operators are stuck paynig the higher fees because of their franchise agreement. They have to pass the cost along or go out of business. A lot of these owners have operated a station in the same location for many years and are only staying afloat by offering other services, like a full service garage.