Gas prce variations

Monday, February 28, 2011 - 7:34pm

We all know gas prices are going up, but by different amounts in different places
So, why is some of the cheapest gas in the state in the Beaumont area, and some of the most expensive in parts of Houston, two towns not that far apart?
For that matter, why is it several cents different within blocks of each other in the same city?
We set out to find out why…
In Texas, the price differential can be extreme. In Glen Rose south of Fort Worth, is the most expensive gas in the state at $3.69 a gallon. And that’s where the dead dinosaurs are.
The cheapest is in the Nederland/Beaumont area at $2.95.
Even in Tyler, for example the range is a full 10 cents.
We found 6 cents difference within two blocks.
“There’s usually two reasons why prices might be different, even within the same town,” says Jeff Lenard of the National Association of Convenience Stores. “Number one is wholesale cost. Everyone has different prices that they pay. It’s almost like the airline industry where everyone’s on the same plane, but everyone paid a different rate. Well, it’s like that with gas, depending on how you get your gas, what your contract is.”
The business model is a factor as well…
The other factor is probably much less likely is what their business model is,” says Lenard. “Do they want to make a little bit more on each customer or do they want to make a little bit on a lot of customers. …most retailers want as many customers as they can so they set the price as close to break even as possible…get the customer inside the store, buy a drink, buy a sandwich, buy anything where they can really make money.”
Big city gas may be pricier for other reasons.
“The real estate costs more,” Lenard explains. “ That’s why you see so few gas stations in Manhatten, there’s only a couple of dozen. People would rather do something else with the real estate.”
And we are nuts over pricing.
“About a third of customers will drive 10 minutes out of their way to save 3 cents a gallon,” Lenard says, “25 cents a fillup. And it costs them about a dollar something to do that. And yet they still feel good about that.”

Comments News Comments

Post new Comment