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Why does one gas station have more expensive gas than the one across the street?

Posted at 6:06 PM, Mar 22, 2022
and last updated 2022-03-22 19:06:47-04

CORPUS CHRISTI, Texas — Up until recently, gas prices just kept going higher and higher. It wasn’t until about a week ago that many so those gas prices dipped down, even up to twenty cents below what it was the week before.

“They’ve gone up quite a lot,” Sara Miller said as she was gassing up her car at the Exxon on Alameda and Doddridge Streets.

She said she usually looks for the gas station that’s the most convenient and if she has a gas card for a certain station, that’s the one she’ll gas up at.

“If there’s one station near my house that has lower prices I’ll definitely choose that one,” Miller said.

The Exxon she filled up at had regular gas for $3.95. The Exxon on Alameda and Airline had their gas for $3.99, but the Valero across the street had regular gas for $3.92.

So why is that?

Daniel Armbruster, the AAA Texas spokesperson said retailers set their own prices based on fuel blends, taxes, and a retailer’s profit margins.

“If that station bought it at a different price, well, they have to sell that fuel out at a different price to meet their profit margins,” Armbruster said.

He said the location of a gas station also plays into why gas can be different prices at gas stations across the street from each other, or even gas stations with the same brand just under a mile away.

“They may be in a better location where they get more traffic and they don’t have to lower the price as much to attract drivers because it’s an easy right turn for them,” he said.

Professor of Economics at TAMUCC Jim Lee said more gas stations on the same street could lead to competition like a price war, though he said price wars aren’t too common nowadays.

“You often see price war. That means it’s like one gas station started to lower the price and the other gas station will try and match that and this chain effect goes on,” Lee said.

But are we going to be seeing those gas prices dip down any more and for how long?

Armbruster said it’s hard to know because travel hasn’t gone down despite the high gas prices. He said with Spring travel and Summer coming up, that could drive prices a little higher again.

He said the state wide average is at about $3.92, about eight cents lower than it was a week ago at about $4.

But he said the demand for gas went down because of the high gas prices and that’s why there’s a small decrease in what you’re paying at the pump.

“For a lot of people with sticker shock of seeing a 4 as the first number on the gas sign, certainly caused some to reduce their driving and hopefully improve their driving habits,” Armbruster said.

He said driver behavior is the number one factor driving fuel economy and consumption.

He said gas prices are higher than a month ago and definitely higher than a year ago, so we will probably continue to see high gas prices.