Why Gas Prices Differ Station To Station


Ever wonder why there are 3 gas stations in the same block and they all vary in price? Or maybe when you get off the interstate the gas prices are up to 50 cents more expensive? Kind of ridiculous right? Basically, there are algorithms developed by these major fuel distributers as well as the large gas station companies that determine your gas prices. There are quite a few things that play large roles in these algorithms:

1. Where the gas station is located (Zone Pricing). As of now, it is perfectly legal to base gas prices on location, and I’m not just talking about interstate exits. I’m also talking about rich neighborhoods, local attractions, busy streets, population, etc.

2. The number of competitive stations. Gas stations usually are placed right beside one another to be competitively priced and to “work together”. There have been several law suites where these stations would monopolize the location’s gas prices by coordinating their prices¬†fluctuations.

3. The brand of the gas stations/marketing. Some big stations such as Shell, BP, Exxon, etc. use great marketing techniques to boast about how their gas is premium and “eco-friendly”. Most of the time this is complete BS because the gas distributers¬†distribute the same gas to almost all the different stations. But, lots of people will flock to these “premium” stations under the influence of good marketing. Though of course there are plenty “mom-and-pop” stations that use budget-brand gas to try to compete with these premium companies.

4. Whether the gas station sells other goods. Some stations such as Sheetz can have a little more control on their own prices because people will go inside and grab a sandwich and fries while they are paying for gas. They figure they can earn lots of extra income from these foods and other products so they can lower their prices a bit more. Makes sense right?

5. Knowledge. How many of times are you driving down the interstate and you have a quarter tank left and you think to yourself, “I’ll stop at the next big exit to grab some gas”. This is a common mistake for people that want to save on gas. I was driving to Charlotte, NC and made this mistake. It ended up costing me about $5.00 extra. If you can get gas at a “no idea where I’m at” exit, or maybe drive a few extra miles off the exit, then do it. You will most likely save big on gas. Also, make use of your smart phone or GPS. Download GasBuddy. This handy app will let you know all the prices nearby and can save you some serious money.

6. The X-Factor: taxes, stock market, war, foreign relations, oil discovery, and production costs. No explanation needed. These will always play a large part in gas pricing and there’s nothing you can do about it.

Feel free to give some other gas-saving tips and tricks below!