Gas price variance. Anyone in the industry?

[GeauxLSU]

OK, my first career job I worked for one of the big oil companies and back then (when dinosaurs were still dying to make oil) the way gasoline was priced at the street was very simple. Survey the competition in your immediate area, then decide if you wanted to be slightly below, at, or above 'the market' depending on how you thought of yourself. Being one of the big boys, we were always 'above'. Which back then, meant one or two CENTS. We did this the same way all across the country. The competition did as well. That seems to be the case until very recently. On a main road locally, a several gas stations are at $3.99 and RIGHT ACROSS THE STREET are a couple at $3.35. All regular, credit. How in the world does that work? And yes, while not several, there was some cars at the $3.99 stations.

 

[SMLEshooter]

I've observed that on occasion. I've just assumed they were more interested in revenue from the slot machines in the back as it seems to be the same stores all the time...

 

[Twitch2120]

Depends on the additives added to the fuel. Chevron is consistently higher than everyone else around me. Also whatever the delivery schedule is and what they paid to top their tanks.

 

[GeauxLSU]

Depends on the additives added to the fuel. Chevron is consistently higher than everyone else around me. Also whatever the delivery schedule is and what they paid to top their tanks.

Additives don't explain 65 cents and most stations get (multiple) daily deliveries on this road. I doubt any are doing under 150,000 gallons a month.

 

[Farmer 2]

Local taxes can make a difference from one city to the next Murphy’s at one county next to me is 15 cents cheaper than Murphy’s in my county

 

[GeauxLSU]

Local taxes can make a difference from one city to the next Murphy’s at one county next to me is 15 cents cheaper than Murphy’s in my county

Same municipality. Literally across the street from each other.

 

[Farmer 2]

Don’t make good sense does it

 

[DirtySouth]

I see it up from my house on Hwy 20 in Bartow County. The Chevron is typically $0.25 + higher than the store 200 yards away.

 

[palmettomoon]

It's been 35 years since I handled a BOL or dipped a tank but I remember we were constantly doing pricing surveys and paying a sub to change the interstate price signs and climb the towers (I'm old, digital wasn't a thing). We were directed to always be a penny lower than competitors within a mile or so of our stations (Starvin' Marvin, Marathon Oil). When ALL of our competitors were at 68.9 cents per gallon, we'd be 67.9. It didn't matter what our delivered cost was or our target margin. If our cost was higher (due to buying from APC), we made less profit. If we were able to get deliveries from corp carriers, our costs were lower (not always) and margins increased.

This recent 20% variance is a mystery for sure. I suspect Macon's higher prices are partly due to tacit collusion with station owners not giving away margin.

 

[Rivershot]

It's been 35 years since I handled a BOL or dipped a tank but I remember we were constantly doing pricing surveys and paying a sub to change the interstate price signs and climb the towers (I'm old, digital wasn't a thing). We were directed to always be a penny lower than competitors within a mile or so of our stations (Starvin' Marvin, Marathon Oil). When ALL of our competitors were at 68.9 cents per gallon, we'd be 67.9. It didn't matter what our delivered cost was or our target margin. If our cost was higher (due to buying from APC), we made less profit. If we were able to get deliveries from corp carriers, our costs were lower (not always) and margins increased.

This recent 20% variance is a mystery for sure. I suspect Macon's higher prices are partly due to tacit collusion with station owners not giving away margin.

On Monday Kroger on Tom Hill was 3.79 and the on near Home Depot was 3.59. I went by both 2 times in 2hrs.