Two gas stations, a 31-cent difference for a gallon of regular. What gives?
Myriad factors impact how much a barrel of crude oil costs -- refinery problems, pipeline breaches, foreign conflicts, pandemics and consumer demand, to name a few.
But once that oil is refined and flowing into tanks, why do prices pingpong so much between suburban gas stations?
In DuPage County last Friday, a gallon of regular cost $3.70 at an Oak Brook Mobil, $3.46 at a Shell in Lombard and $3.39 at a Delta Sonic Car Wash in Elmhurst -- a 31-cent spread.
Gas at a Woodman's station in North Aurora was $3.04 per gallon on Jan. 14, but just a few miles away in St. Charles it was $3.45.
That swing isn't new in large urban areas, GasBuddy's Head of Petroleum Analysis Patrick De Haan said. "Much of the price strategy is station by station.
"Keep in mind, stations are all generally paying a price that could be 5 cents to 20 cents a gallon higher or lower than their competitors, depending on what day they buy fuel on, who they buy from, etcetera."
The latest COVID-19 surge is playing into volatility with commuters still working remotely, AAA's Molly Hart noted.
"With fewer people driving, stations aren't turning over their inventories as fast," she said. "That means service stations who bought their gas weeks ago at high prices -- and haven't been able to sell it all -- won't lower the price to match their competitors, or they'll lose money.
"Other stations that bought low can afford to sell cheap."
Another factor is who owns the station -- an independent operator or an oil company.
Smaller mom-and-pop stations may be "a bit less in tune to market trends and may keep their prices higher because they have fewer resources to be as competitive," De Haan said. "Some stations may be in more affluent areas where motorists are less price-sensitive so they charge a higher price."
Also germane are wages, equipment, leases and insurance varying at each business, the U.S. Energy Information Administration stated.
Location plays a significant role in pricing as well, Hart said.
"If there are stations close to each other, they are more likely to offer competitive pricing. If a station is out in the middle of nowhere, they're less likely to offer a competitive price," she explained.
One mystifying anomaly is when two stations a stone's throw from each other post different prices. That's a situation where traffic patterns and access can dictate the bottom line, experts said.
If you're one of those people who notices the bewildering variety of gas prices, you're smart, De Haan said. Paying attention pays off and "generally the savings can amount to $100 to $200 a year, especially in a bigger metro area like Chicago," he said, noting GasBuddy offers a free app with price information.
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You should know
Across the region, there's a sprinkling of different gas taxes. For example: DuPage County's gas tax is 8 cents a gallon; Cook County charges 6 cents, in Kane, McHenry and Will counties it's 4.1 cents, and in Lake the rate is 4 cents. To look up local gas taxes, go to mytax.illinois.gov.
For perspective, a gallon of regular in the metro region cost $3.57 on average Friday, $3.50 a month ago, and $2.62 a year ago.
You should know
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