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Why gas prices vary from station to station

Marketplace -- Don't look now, but gas prices are on the rise again -- 45 cents in the past month, 33 straight days of increases, according to AAA.

Sure, oil prices are going up too, but how does it work down at the retail level? Why is one station $4-a-gallon and the one down the road $4.05? We called a guy we know who runs a gas station. Oz Elam has a place on Boston Post Road in Pelham, N.Y.

Right now, gas at Elam's station is going for $3.99. Elam said he came up with the number by checking his wholesale numbers and the shipment costs. "Then I'll make a quick ride around the neighborhoods, I check my margins, add a couple pennies. But we think the $4 is the red line that we shouldn't cross...$3.99 is definitely much more effective than $4."

Contrary to popular belief though, Elam said he isn't ...

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Submitted Feb 21, 2013 By: BurntOrange

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honda0105 Champion Author Tallahassee Posts:18,828 Points:1,637,220 Joined:Nov 2008	Message Posted: Feb 25, 2013 10:00:35 PM Ignore honda0105 Report Abuse other than greed on Pig Oil's part, no reason for prices to be this high.
honda0105 Champion Author Tallahassee Posts:18,828 Points:1,637,220 Joined:Nov 2008	Message Posted: Feb 25, 2013 3:58:57 AM Ignore honda0105 Report Abuse lukus, indeed they are doing it again.
beachd8 All-Star Author Orange County Posts:877 Points:140,975 Joined:Oct 2012	Message Posted: Feb 22, 2013 4:09:50 PM Ignore beachd8 Report Abuse Oh, Elam needs to study accounting & economics . . . good stuff to know.
beachd8 All-Star Author Orange County Posts:877 Points:140,975 Joined:Oct 2012	Message Posted: Feb 22, 2013 4:08:16 PM Ignore beachd8 Report Abuse $3.99 sounds good right now. That station owner can move to my neighborhood anytime.
EssexAdri Champion Author Jacksonville Posts:1,168 Points:284,770 Joined:Jul 2010	Message Posted: Feb 22, 2013 2:25:46 AM Ignore EssexAdri Report Abuse I don't question Mr Elam's personal method for pricing in his store, but to imply that, that is the norm for the industry doesn't hold water. If it actually was the norm, then all gas prices in an area would be roughly the same, we'll say a 3-7 cent difference over-all. But unless you're in the smallest of towns (where there's only a couple of stations to begin with), you see that it is not the case. To explain I'll give you 5 examples: San Diego, CA - Rosecrans Blvd Jacksonville, FL - Atlantic Blvd Washington, NC - Hwy 17/32/264 (Pactolos Rd/5th St/John Small Ave) Raleigh, NC - CApitol Blvd Virginia Beach, VA - Virginia Beach Blvd In the past 10 yrs I have driven on each of these roads several dozen to several hundreds of time, each. You see one price, that you're not happy with paying, so unless you have no choice, you hold out until the next station, then 5 blocks down the road you see another station, but this time the price is 5 cent higher, then half a mile down its 7 cent higher than the last, then 3 blocks further down it 5 cent cheaper than the last, then 5 or 6 blocks down its 9 cent higher than the highest you've previously seen, through the rest of the road if you keep going you see a similar pattern. Over a 2 mile stretch of the same road/street you've seen a price differeNCe of 21 cents. Take it on a little larger distance scale. Drive up I-95 through Georgia. Gas at exit 49 (all stations at exit 49) is consistently 13-17 cent higher than it is at exit 46 three miles back, then at the next exit, 51 or 52 (I don't remember if its 2 or 3 miles to the next exit after 49) it is consistently 9-12 cent "cheaper" than it was at exit 49. Then the next exit after that one is usually 2-5 cent "cheaper" than that one, and prices stay within 2-5 cent of that price all the way until just before you get into the Savannah area around exit 80. Take it on a smaller scale. There are atleast 6 different areas in Jacksonville, FL & atleast 4 in Virginia Beach, VA where there are 2 stations less than a block from each other, but on different sides of the street, and 1 of those 2 (consistently the same 1) is always 8-15 cent cheaper than the other. Sure there are ethical & honest station owners out there, ones that charge a fair price based on what they paid at whole sale, but there's nowhere near as many of them as the industry tries to make us believe. There is "MASSIVE" price gouging going on at gas stations. The whole oil industry from the ground up knows through statistics and common sense certain periods that more people are driving, and driving further, so the refineries storage facilities know when they need to ramp up production & distribution. So why is it that every Easter, 4th of July, Thanksgiving, & Christmas the prices jump 10-15 cent the week prior, and then 5-15 cent more 1-2 days before the actual holiday, and always start slowly dropping 3-5 days after the holiday, taking atleast a week from when they started dropping to settle back down to the price where they were a week and a half before the holiday?... ...the answer... ...Deliberate, Planned, Conspired Price Gouging... It is against the law. So why are these station owners not being charged & prosecuted? I'm serious when I ask that. The primary penalty for price gouging is fines, with jail time possible, depending on the severity & if a natural disaster is involved. This would be a plus for city or county governments, because would be considered small scale under the price gouging laws, and therefore be under their jurisdiction & responsibility to prosecute, making them the benefactors of the imposed fines... So why is it that no law enforcement on any level is enforcing the law in this regard?... I honestly can't propose an answer to that one. But I can certainly say that having a president that has both face to face and through Executive Orders, ordered the Federal DA not to enforce certain laws that he (the president) doesn't like or are inconvenient to him and his party, doesn't help the matter of enforcing any law. [Edited by: EssexAdri at 2/22/2013 4:29:24 AM EST]
NedW Champion Author Indianapolis Posts:5,750 Points:1,167,995 Joined:Mar 2008	Message Posted: Feb 21, 2013 11:07:38 PM Ignore NedW Report Abuse Thank you for submitting this article, BurntOrange.
satanzangl99 Rookie Author Columbus Posts:2 Points:172,040 Joined:May 2011	Message Posted: Feb 21, 2013 10:49:13 PM Ignore satanzangl99 Report Abuse ok
KrsnaDragon Champion Author Montreal Posts:2,547 Points:559,000 Joined:Nov 2011	Message Posted: Feb 21, 2013 10:45:57 PM Ignore KrsnaDragon Report Abuse Here in Montréal there's usually not much variation. I'd love to read more articles about gasoline pricing locally, at the retail level.
ShadowACE Champion Author Boston Posts:9,159 Points:2,177,275 Joined:Jun 2006	Message Posted: Feb 21, 2013 10:42:22 PM Ignore ShadowACE Report Abuse Bigoilscamsus20 said "What we need is for Congress to set price and profit controls on all petroleum products in America!" WHOA, Big!! Whatever you've been smoking and/or drinking has apparently turned your brain to mush. Congress is the LAST entity that we would ever want to "set price...controls" on almost anything! Have you noticed how many zeros are following the real numbers in the national debt lately? Or the fact that they haven't been able to create an actual budget for years? And you want THEM to set the price of gas!?!?! We'd be paying $30/gallon before the end of the year - and NONE of that money would go to maintain the roads!
ican2step Champion Author Pittsburgh Posts:1,811 Points:452,400 Joined:Feb 2012	Message Posted: Feb 21, 2013 10:39:33 PM Ignore ican2step Report Abuse 33 straight days???????????????
Cableman66 Champion Author North Carolina Posts:2,247 Points:517,585 Joined:May 2011	Message Posted: Feb 21, 2013 10:37:32 PM Ignore Cableman66 Report Abuse Don't worry just feed the machine and enjoy the ride. Just remember Obama has our back. He's going to take care of the working class of people. Takers will out number the makers and what wonderful world that will be. Just watch the world news and see your future.
defiancegasman Champion Author Ohio Posts:7,099 Points:1,327,520 Joined:May 2006	Message Posted: Feb 21, 2013 10:36:28 PM Ignore defiancegasman Report Abuse TOTAL BULL!!! Gas goes UP every time BIG OIL has one of their PLANNED DOWN TIME at the REFINERS!!! There is a GLUT of WORLD OIL right now. The Saudi's even cut oil production by 1 million barrels a day because of over supply!!!
unicornpmb Champion Author Buffalo Posts:8,626 Points:1,656,240 Joined:Sep 2005	Message Posted: Feb 21, 2013 10:33:45 PM Ignore unicornpmb Report Abuse Because they can.
wshokie12 Champion Author Winston-Salem Posts:1,455 Points:243,285 Joined:Aug 2012	Message Posted: Feb 21, 2013 10:32:02 PM Ignore wshokie12 Report Abuse I'm still amazed when I see people paying as much as .05 cents more at a station accroos the street.
badharley Champion Author Tampa Posts:1,154 Points:766,915 Joined:Jul 2010	Message Posted: Feb 21, 2013 10:30:39 PM Ignore badharley Report Abuse Just GREED.
crreed1 Champion Author West Virginia Posts:2,100 Points:2,550,715 Joined:May 2005	Message Posted: Feb 21, 2013 10:29:23 PM Ignore crreed1 Report Abuse don't buy gas unless you have too
jetskijerry Champion Author North Carolina Posts:4,036 Points:799,970 Joined:Mar 2011	Message Posted: Feb 21, 2013 10:27:21 PM Ignore jetskijerry Report Abuse it's a real problem
jetskijerry Champion Author North Carolina Posts:4,036 Points:799,970 Joined:Mar 2011	Message Posted: Feb 21, 2013 10:27:06 PM Ignore jetskijerry Report Abuse no go
10k Champion Author North Carolina Posts:21,485 Points:2,281,720 Joined:May 2006	Message Posted: Feb 21, 2013 10:27:03 PM Ignore 10k Report Abuse .."..But we think the $4 is the red line that we shouldn't cross...".. what in the h*ll kinda price does he think $3.999 is ??..one gallon: $4.00..ten gallons: $39.99, one whole penny from $4/gallon..
J Eric Champion Author Los Angeles Posts:10,388 Points:2,093,880 Joined:Feb 2004	Message Posted: Feb 21, 2013 10:24:44 PM Ignore J Eric Report Abuse Oh, yeah, drive around the neighborhood, see what others are selling for and "add a couple pennies." Real intelligent way of being price-competitive.
RAE344 Champion Author Virginia Beach Posts:3,207 Points:688,245 Joined:Jun 2011	Message Posted: Feb 21, 2013 10:24:26 PM Ignore RAE344 Report Abuse The gas producers have a strangle hold on the gas stations owners. They control the prices not the station.
mfeldstein Champion Author Ottawa Posts:8,301 Points:1,956,230 Joined:Feb 2007	Message Posted: Feb 21, 2013 10:24:21 PM Ignore mfeldstein Report Abuse Could it be competition?
Bigwaynef Champion Author South Carolina Posts:11,674 Points:2,108,435 Joined:Dec 2006	Message Posted: Feb 21, 2013 10:23:28 PM Ignore Bigwaynef Report Abuse Same here not that much varience, we do have a couple stations that really jack the prices though...
shopnshop Champion Author Dallas Posts:1,125 Points:329,080 Joined:Aug 2008	Message Posted: Feb 21, 2013 10:23:14 PM Ignore shopnshop Report Abuse getting higher prices
boatfloyd Champion Author Jacksonville Posts:1,858 Points:415,675 Joined:Mar 2012	Message Posted: Feb 21, 2013 10:22:31 PM Ignore boatfloyd Report Abuse I guess if everybody starts making their own coffee, the gas stations will have to go out of bussiness.
mlmeng Champion Author Michigan Posts:1,775 Points:618,010 Joined:Mar 2011	Message Posted: Feb 21, 2013 10:22:14 PM Ignore mlmeng Report Abuse "...33 straight days of increases..." It can only get worse.
ricebike Champion Author New Jersey Posts:10,106 Points:1,870,850 Joined:Oct 2005	Message Posted: Feb 21, 2013 10:21:51 PM Ignore ricebike Report Abuse ok i thought it was zone pricing
pastorpaulcg Champion Author Virginia Posts:3,615 Points:775,785 Joined:Dec 2010	Message Posted: Feb 21, 2013 10:21:11 PM Ignore pastorpaulcg Report Abuse there's not too much variance around here
CCLighthouse Champion Author Hartford Posts:1,131 Points:238,700 Joined:Aug 2012	Message Posted: Feb 21, 2013 10:20:49 PM Ignore CCLighthouse Report Abuse Night folks!
TheeRedRam Champion Author Hartford Posts:3,303 Points:700,335 Joined:Jun 2011	Message Posted: Feb 21, 2013 10:18:03 PM Ignore TheeRedRam Report Abuse More Madness
jkpsr Champion Author New Jersey Posts:4,207 Points:1,127,915 Joined:Jun 2005	Message Posted: Feb 21, 2013 10:17:45 PM Ignore jkpsr Report Abuse It is a problem with the speculators.
tedjm1 Champion Author New York Posts:5,609 Points:800,300 Joined:Dec 2006	Message Posted: Feb 21, 2013 10:17:44 PM Ignore tedjm1 Report Abuse Stations are tough to run.
singlemom27 Champion Author Ventura Posts:3,248 Points:666,910 Joined:Apr 2011	Message Posted: Feb 21, 2013 10:17:31 PM Ignore singlemom27 Report Abuse Station owners are squeezed until it hurts...Big Oil is where the money goes.
ScottTee Champion Author Detroit Posts:4,527 Points:1,090,320 Joined:Mar 2010	Message Posted: Feb 21, 2013 10:17:00 PM Ignore ScottTee Report Abuse screwed again
Rooster922 Champion Author Wilmington Posts:3,925 Points:682,795 Joined:Jan 2009	Message Posted: Feb 21, 2013 10:16:39 PM Ignore Rooster922 Report Abuse Well . . . . location, location, location . . . I don't know, bro.
CivicMA Champion Author Boston Posts:2,036 Points:562,215 Joined:Jun 2011	Message Posted: Feb 21, 2013 10:13:59 PM Ignore CivicMA Report Abuse More interesting is that stations near each other tend to have very similar pricing, so as not to compete.
pa79th Champion Author Pennsylvania Posts:1,922 Points:1,243,800 Joined:Jun 2007	Message Posted: Feb 21, 2013 10:13:51 PM Ignore pa79th Report Abuse Greeeeeeeeed!
obimerrill Champion Author Cincinnati Posts:1,580 Points:317,415 Joined:Jul 2012	Message Posted: Feb 21, 2013 10:12:20 PM Ignore obimerrill Report Abuse A lot of psychology in 3.999 vs.4.009...3.999 does look better to us!
regout Champion Author Quebec Posts:3,095 Points:860,405 Joined:May 2010	Message Posted: Feb 21, 2013 10:11:30 PM Ignore regout Report Abuse Because speculators want more money.
unclenorman Champion Author Tampa Posts:1,479 Points:166,855 Joined:Jan 2012	Message Posted: Feb 21, 2013 10:11:27 PM Ignore unclenorman Report Abuse Why use a place in NY? NY is a defective culture,try somewhere else!!!!!!!!!!!!!!
Matt G Champion Author Boston Posts:4,668 Points:2,799,765 Joined:Jun 2004	Message Posted: Feb 21, 2013 10:11:03 PM Ignore Matt G Report Abuse How about trying to price it to make a living
naspa Champion Author Cleveland Posts:1,412 Points:379,625 Joined:Jan 2012	Message Posted: Feb 21, 2013 10:10:56 PM Ignore naspa Report Abuse Wall street is the mother of all wrong in this country.
N5EXY Champion Author Austin Posts:5,632 Points:1,536,990 Joined:Jul 2004	Message Posted: Feb 21, 2013 10:10:39 PM Ignore N5EXY Report Abuse Maybe it is competition and free enterprise?
bigsranch Champion Author Houston Posts:3,282 Points:1,032,205 Joined:Apr 2007	Message Posted: Feb 21, 2013 10:10:21 PM Ignore bigsranch Report Abuse Typically, a station's competition on price is on the same intersection or within a couple of blocks. Depending on how profitable their C-store is, some stations can afford to charge less. In affluent areas, they can charge more because the rich folk don't shop around. Supply and demand, not greed, drives the price.
Rageagainsttm Champion Author Tampa Posts:8,422 Points:1,927,885 Joined:Jul 2007	Message Posted: Feb 21, 2013 10:10:16 PM Ignore Rageagainsttm Report Abuse $3.999 is really $4. Agreed.
BALRSTATUS All-Star Author Grand Rapids Posts:580 Points:119,450 Joined:Feb 2013	Message Posted: Feb 21, 2013 10:09:20 PM Ignore BALRSTATUS Report Abuse nice
sjhman Veteran Author Atlanta Posts:416 Points:298,140 Joined:Sep 2008	Message Posted: Feb 21, 2013 10:07:35 PM Ignore sjhman Report Abuse Very interesting
BobD2009 Champion Author Long Island Posts:7,129 Points:1,267,485 Joined:Apr 2009	Message Posted: Feb 21, 2013 10:07:11 PM Ignore BobD2009 Report Abuse $3.999 is really $4.
Glock26 Champion Author Dayton Posts:1,654 Points:658,135 Joined:Mar 2011	Message Posted: Feb 21, 2013 10:06:26 PM Ignore Glock26 Report Abuse Greed!!!
millerin Champion Author Orlando Posts:2,332 Points:487,315 Joined:Jan 2012	Message Posted: Feb 21, 2013 10:06:25 PM Ignore millerin Report Abuse making money