Why the variations in gas prices?

The in basket: William Lockard of Poulsbo wrote me back in May to say, “In Poulsbo today, I noticed prices at two gasoline stations – $4.29 at one and $4.25 at the other for regular gasoline.

“On our evening ABC news it was reported that the national average had fallen to about $3.72 (I  believe) whereas the Washington state average was $4.18 and the average in Seattle was $4.22.

“Those of us who buy gasoline in Kitsap County already know how expensive it is compared to other places but no one bothers to explain why.  Can you enlighten us on this matter and if possible tell us what we can do to convince our local gasoline distributors to bring our prices more in line with the rest of the country?”

The out basket: I have never been able to get an explanation from fuel distributors for local pricing discrepancies, going way back to before the birth of the Road Warrior column in 1996 and I was just doing news stories about it.

I was always told the same thing – it all arises from “competitive pressures” in the area in question.

But I advised Willilam, and I advise any of you who share his mystification, to Google “differences in gas prices.” You’ll find a wealth of discussions and speculation on the subject, mostly about discrepancies from region to region.

But among the sites shown high on that site was one from an ABC affiliate in Utah dealing with local variations. While hardly exhaustive, it does say proximity to a freeway can raise the price due to demand and whether the station is owned or franchised can make a difference.

Also, it said, “Gas stations occasionally hike prices just before a shipment of new gas comes in to pay for that shipment. This is especially true when prices are increasing quickly and the next shipment is much more expensive.”


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