Here’s Why Gas Station Prices Vary in the Same Area

You're on fumes and have no choice but to fill up at the first gas station you find.

Of course, the one you find is pricier than most, but there's nothing you can do. At least get a few bucks in to get you safely back on the road, right?

This has happened to me, too. I actually had to use one where the price was $5.99 cash, $6.13 credit. Then, after putting in $10 worth, wouldn't you know it I see a gas station at $3.30.

We know that gas prices fluctuate based on the price of crude oil. But why can stations across the street from each other have such different prices?

However, according to the How Stuff Works website, stations near each other can have different prices for these four reasons.

NAME BRAND VS GENERIC STATIONS

Crude oil is processed into petroleum products, and just like name brands versus generic, Exxon or BP, for example, buy its contracted brand of gasoline, which boasts a special, higher quality recipe. An unbranded station like Costco buys basic, wholesale gasoline. It's branded and unbranded, basically.

PROFIT

The gas station owner, franchisee, or corporation wants to make money, so after they've paid their bills, they set their price. This is where the mystery or transparency, depending on the station, determines the price you see on the gas pumps.

TRANSPORTATION COSTS

Gas Stations across the street from each other will vary in price depending on how they get their gas. That's based on contracts, purchasing amounts, and routes, according to How Stuff Works.

Moving crude oil to a refinery, through a pipeline or across an ocean, and on a truck to supply the station adds up. Based on contractual agreements, routes from rig to pump vary considerably, making one station's gasoline more expensive than the others.

 

STATE/REGIONAL GUIDELINES VARY

Cities with higher smog levels or higher air quality laws use reformulated gasoline, which is more expensive to produce.  Air quality regulations, in general, vary from state to state as well.