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Why gas prices vary from station to station in suburbs

Posted June 14, 2011 12:00 am

Gasoline prices are expected to fall this week, with the trend most evident where competing stations sit across the street, as at the corner of Elmhurst and Algonquin roads in Mount Prospect where the Speedway and the Shell were selling regular for $4.02 a gallon Monday afternoon. Bill Zars/bzars@dailyherald.com

You're filling up on regular gasoline at $4.39 a gallon and the station across the street drops the price four cents before your eyes. You're annoyed, but shrug it off.

You drive a few miles and gas prices are 30 cents cheaper … aarrgh!

Suburban residents are all too familiar with the frustration of driving around trying to find cheap gas.

How do some stations sell gasoline for 10, 20, 30 cents a gallon cheaper than their competitors?

That's the vexing part of gas pricing that consumers just don't get, says Beth Mosher, a spokeswoman for Aurora-based AAA of Chicago.

Gas pricing generally is based on the cost of oil distribution, production and taxes, but a slew of other factors figure in too.

The role competition places is clearly evident at some area gas stations situated across from each other at prominent intersections as managers try to match each other penny for penny.

“Competition certainly factors in,” Mosher said. “Where gas stations are positioned is also a factor (whether it's) close to a highway or right across the street from another gas station.”

Another factor that affects pricing is whether it's a brand name station that can command a premium, a discount club or a mom-and-pop operation.

“The Costcos and the Sam's Clubs are generally going to have more competitive prices than others will, so they are going to bring in lower prices to an area” as nearby stations lower prices to avoid losing too much business, Mosher said.

Gas stations that don't sell consumer goods will tend to have higher priced gas, she added. That's because stations with consumer goods items derive a majority of their profits from selling items such as chips and pop as opposed to gasoline itself, she said

The recent price volatility in wholesale markets — and how quickly individual stations react to it — has amplified price differences.

“There's so much that goes into the price of a gallon of gasoline we are never comparing apples to apples,” Mosher said.

According to AAA, the price of a gallon of regular gas in the Chicago area was $4.18 on average Monday, while the state average was $4.02.

Alaska, Connecticut, Hawaii and Illinois are the only states with gas prices above the $4 mark. Prices are expected to drop below $4 in Illinois by the end of the week, Mosher said.

She advised motorists to be smart about where they fill up and compare prices through phone apps and websites, such as AAAmaps.com, that tell you where to find the cheapest gas.

Gasoline prices are expected to fall this week, with the trend most evident where competing stations sit across the street, as at the corner of Elmhurst Road and Oakton Street in Des Plaines where the 7-Eleven and Mobil were selling regular for $4.02 a gallon Monday afternoon. Bill Zars/bzars@dailyherald.com

Sampling of low gas prices

A sampling of some of the lowest gas prices in the suburbs, courtesy of GasBuddy:

$3.98 — Sam's Club, Oakton Street & Mount Prospect Road, Des Plaines.

$3.99 — 7-Eleven, Arlington Heights & Biesterfield roads, Elk Grove Village.

$3.99 — Thorntons, Devon Avenue & Wooddale Road, Wood Dale.

$3.99 — Speedway, Arlington Heights Road & Devon Avenue, Itasca.

$4.02 — Citgo, Elmhurst Road & Dempster Street.

$4.02 — Shell, Elmhurst & Algonquin roads, Mount Prospect.

$4.05 — Devon Avenue & Wood Dale Road, Elk Grove.

$4.07 — Marathon, Algonquin & Busse roads, Mount Prospect.

$4.09 — Costco, Meecham Road & McConnor Parkway, Schaumburg.

$4.15 — Marathon, Kirchoff Road & Town Square Drive, Rolling Meadows.

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