OK, so I’m driving down N Tryon to go to work this morning. I see a gas station with gas at $3.89. I go no more than 100 yards further down the road and there is a station with gas at [B]$3.59[/B]. How the hell can two gas stations less than a quarter of a mile apart be 30 cents a gallon different???
I was just wondering if anyone knew how or why this happens.
[QUOTE=Chisox17;340143]OK, so I’m driving down N Tryon to go to work this morning. I see a gas station with gas at $3.89. I go no more than 100 yards further down the road and there is a station with gas at [B]$3.59[/B]. How the hell can two gas stations less than a quarter of a mile apart be 30 cents a gallon different???
I was just wondering if anyone knew how or why this happens.[/QUOTE]
I saw the same thing this morning, but not on Tryon obviously. Different stations have different expenses. Maybe the higher priced place hadn’t raised its prices yet? I just buy it at the cheapest place as that’s what will make the other place lower its price.
Its based on over head. Gas stations make most of their money from their stores. If their store doesnt sell, they recoup some of that cost by raising prices.
However, when you think about it, if you keep your gas profit as low as possible, you get more people pulling into your station, which means more salesinside the store. Thats where they make their bread.
OK, so I'm driving down N Tryon to go to work this morning. I see a gas station with gas at $3.89. I go no more than 100 yards further down the road and there is a station with gas at [B]$3.59[/B]. How the hell can two gas stations less than a quarter of a mile apart be 30 cents a gallon different???I was just wondering if anyone knew how or why this happens.
There was a 16 cent difference out at my end of Harris blvd near 77.
I saw the gas @ $4.06 on Harris Blvd yesterday just a few blocks from $3.66 gas. On the way to Raleigh, Thomasville and the area near Burlington usually have cheaper gas. Another thing I have noticed is that there is no longer a noticable differance between the most well known companies and off brands price.
Retailers claim to make only about 3%, don’t they? It doesn’t add up, especially with credit cardcharges being about 3% for retailers.
[QUOTE=Gill2003;340168]Its based on over head. Gas stations make most of their money from their stores. If their store doesnt sell, they recoup some of that cost by raising prices.
However, when you think about it, if you keep your gas profit as low as possible, you get more people pulling into your station, which means more salesinside the store. Thats where they make their bread.[/QUOTE]
Gil, actually the distributors tell the stations what to charge.
Believe it or not, most stations will charge as little as possible for the reason you said - to get you in the door to by coffee and $1.00 candybars.
[QUOTE=Gill2003;340168]
However, when you think about it, if you keep your gas profit as low as possible, you get more people pulling into your station, which means more salesinside the store. Thats where they make their bread.[/QUOTE]
Yep, it’s called a loss leader and used by the likes of Wawa and Sheets to get folks inside the store to buy higher margin products. Gas stations don’t make that much on selling gas. Credit card fees eat into the profits even more which is why we see the “cash only prices” more and more these days.
I thought gas prices were set by zones, regardless of the company?
[QUOTE=Gill2003;340168]Its based on over head. Gas stations make most of their money from their stores. If their store doesnt sell, they recoup some of that cost by raising prices.
However, when you think about it, if you keep your gas profit as low as possible, you get more people pulling into your station, which means more salesinside the store. Thats where they make their bread.[/QUOTE]
That is understandable, but who chooses to buy gas or shop where gas is .30 a gallon higher. Of course its our nature to try to save a penny on gas and then pay out the nose for a soda and candy bar.
Gil, actually the distributors tell the stations what to charge.Believe it or not, most stations will charge as little as possible for the reason you said - to get you in the door to by coffee and $1.00 candybars.
Really? I could of swore i remember hearing that gas station owners had to keep their prices high just to break even on the price they paid on gas.
Or is it that if they dont sell enough, when they get cheaper gas in, they cant lower the price because they wont break even?
Each station sets the price for the fuel they just purchased. For example station A might be using fuel just put in the ground that they bought for x amount while station B is still working on the supply still in the ground a different amount. Common sense says it should even out over a week period so you can take it from there.
My question is if oil was $100.00 a barrel yesterday what was the price per gallon the last time it was there. I do not think it was $3.69 a gallon? The oil companies have succeded in making me think $ 3.50 is now cheap gas!! Great job guys but I need a kiss if you are doing that to me.
When I worked at Autobell, we set our gas prices.
Word is we’ll be at $5 this afternoon. Some places here in Gastonia are already $4.29.
[QUOTE=Chisox17;340143]OK, so I’m driving down N Tryon to go to work this morning. I see a gas station with gas at $3.89. I go no more than 100 yards further down the road and there is a station with gas at [B]$3.59[/B]. How the hell can two gas stations less than a quarter of a mile apart be 30 cents a gallon different???
I was just wondering if anyone knew how or why this happens.[/QUOTE]
I got gas there this morning. They were out of Regular… I got mid grade for 3.80 there though.
because we haven’t built a refinery in 30 years
because we haven't built a refinery in 30 yearsWINNER!
Oh yeah, to address your question. The individual station does not set the price. They are told what to set it at.
Gas stations use zone pricing from what I learned in school. This is info I just found on wikipedia.
Zone pricing - Prices increase as shipping distances increase. This is sometimes done by drawing concentric circles on a map with the plant or warehouse at the center and each circle defining the boundary of a price zone. Instead of using circles, irregularly shaped price boundaries can be drawn that reflect geography, population density, transportation infrastructure, and shipping cost. (The term “zone pricing” can also refer to the practice of setting prices that reflect local competitive conditions, i.e., the market forces of supply and demand, rather than actual cost of transportation.)[citations needed]
Zone pricing, as practiced in the gasoline industry in the United States, is the pricing of gasoline based on a complex and secret weighting of factors, such as the number of competing stations, number of vehicles, average traffic flow, population density, and geographic characteristics. This can result in two branded gas stations only a few miles apart selling gasoline at a price differential of as much as $0.50 per gallon.[dubious – discuss]
Many businesspeople and economists state that gasoline zone pricing merely reflects the costs of doing business in a complex and volatile marketplace. Critics contend that industry monopoly and the ability to control not only industry-owned “corporate” stations, but locally owned or franchise stations, make zone pricing into an excuse to raise gasoline prices virtually at will. Oil industry representatives contend that while they set wholesale and dealer tank wagon prices, individual dealers are free to see whatever prices they wish and that this practice in itself causes widespread price variations outside industry control.[citations needed]
[QUOTE=VA49er;340179]Yep, it’s called a loss leader and used by the likes of Wawa and Sheets to get folks inside the store to buy higher margin products. Gas stations don’t make that much on selling gas. Credit card fees eat into the profits even more which is why we see the “cash only prices” more and more these days.[/QUOTE]
I had never heard of WaWa till I went to Norfolk this summer. They don’t have those here.
Yes, I know, I just contributed nothing to the thread. Oh well.
Wholesale gas sold for $5.00 gallon this morning according to the info I got from someone who purchases in bulk. Some of the stations went ahead and raised their prices so they would not be raided and potentially run out once word got out, and so they could make some extra money on the stock they had already paid for also. I paid $3.65 when I topped off on the way home and felt like I was getting a great deal.