The Gas Price Setting Game.



By Mike Meehan - Cape Coral FL

 

We all wonder at times how the price at the pump is set for our gasoline.  We are told that there are many factors. At time s this may be true.  But also, it is whatever the traffic will tolerate.  A new station opens and starts off with prices about 10˘ a gallon below the going average for the area.  This is not unusual for a new business to offer lower prices at first to attract patrons.   Within minutes their lower prices are matched by one of their competitors.

A new RaceTrac gas station and large convenience store opened today in Cape Coral.  As a gas price reporter for gasbuddy.com  I have watched the progress of this station.  I talked to one of the managers and entered the station into the master station list for GasBuddy.  The station opened around five in the afternoon with an initial price for regular gas, 87 octane, of $3.299 per gallon.  This was a full 10˘ or more lower than all the stations in the area.  The other grades including diesel were also comparatively lower.  The manager told me that they would keep the prices low for about two weeks.

Not more than two hours later I went through the Murphy gas station at one of the local Wal-Marts.  Much to my surprise Murphy’s prices matched the new RaceTrac to the penny.  This was a 10˘ a gallon across the board drop for Murphy’s prices.  Coincidence, drop in crude oil prices, another two refineries go on-line?  I don’t think so.  It is all about whatever the traffic will tolerate and don’t let the new guy get the upper hand.  It will be interesting to see of any of the other stations follow suit with this new entry to our lineup of gas stations.

 

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 All rights reserved - Mike Meehan - May 2, 2013