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Blackberry's avatar

Why do some gas stations have differing prices?

Asked by Blackberry (34157points) April 9th, 2010

You know….When one gas station is $2.55, and another is $2.65. People obviously will not go to the higher one, and there is a huge line at the cheaper one. Is there a reason why the higher gas station has their price so high (for regular).

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8 Answers

dpworkin's avatar

It depends on their contract with their deliverer. They have very little leeway, as the profit margin on gasoline is so small. That’s why so many gas stations have become convenience stores.

JLeslie's avatar

Usually if they are right next to each other the other station will quickly change their price to compete. I think it is dictated by the owner of each station. Or, I think some are sorporately owned and some are franchises. Possibly some brands target higher end demographics, and they might have their premium price a little lower and their regular price a little higher or vice versa, I am not sure the logic in the pricing of gas. I do know that what @dpworkin says is correct regarding the convenience stores, that is where they make a lot of money.

My husband is from Mexico and all gas was the same price everywhere, set by the government.

njnyjobs's avatar

Gas prices are like any other commodity. Nationally branded fuel cost more than generic or independently marketed.

Also, Premium brands boasts of additives in the fuel that they claim are good for your engine that they claim are lacking from the cheapo station fuel.

erichw1504's avatar

The same reason Walmart has lower prices on certain products.

ZAGWRITER's avatar

I think the question should be, “Why are so many gas stations priced the same?” It doesn’t cost them the same to manufacture it and distribute it, they all put different additives in it, have different overhead, etc, and you mean to tell me that the price they charge just happens to be the same? Cough*pricefixing*cough.

rahm_sahriv's avatar

Location, location, location. As well as what they paid for the gas. Although I have noticed that even though they have paid a lower price at the time, if there is a hike in price due to increase costs of gasoline, they charge the higher price automatically.

davidbetterman's avatar

They don’t want us to know that price-fixing is going on.

thriftymaid's avatar

Why wouldn’t they?

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