Gas Prices
[I]t is worth pointing out that gasoline prices, while higher than a few years ago, are still well short of their historic highs. Adjusted for inflation, gas prices are still significantly lower than they were at the beginning of the 1980s, and they have been at historical lows for the past decade: No wonder demand is high.
I wish I’d thought of that. What strikes me so unusual is the radical variability of prices. The premium grade my vehicle requires is currently selling from as low as $1.83 (I saw it for that in Arlington yesterday) to over $2 ($2.02 in Fairfax yesterday, and that’s probably not the highest). We’re only talking about a distance of ten miles or so.
Via Virginia Postrel, who ponders
What will Kerry do about the prices of T-shirts? Computers? Shampoo? Diet Coke? (I buy a lot more Diet Coke than gasoline, and I want those loss-leader specials back.)
Indeed. Fortunately, we still have plenty of loss-leader Diet Coke in these parts. I just bought several cases at $2 each.
Much of the variability has to do with location. For instance, prices near major interstates are usually higher than they are a few blocks away from the highway. I surmise that it’s because there’s a different customer base for neighborhood stations than for freeway stations.
Also, most gas stations in a small area will charge within 1-2 cents of each other, so as not to be seen as overly high. When I worked at a Shamrock many years ago, the manager had to drive around a five block radius and survey the prices at each of the stations there. Our station had to be no more than 1 cent higher than the lowest price.
I paid $1.40 a gallon over the weekend at a station on an exit on I-85. The other stations on that exit and the next one were around $1.49-$1.53 but this particular station seemed to be dropped below the rest because it was hard to get to on a frontage road. Plus stations in SC on I-26 and I-85 seem to be cheaper than other places in the upstate due to their proximity to the NC border where prices jump up because of NC’s higher gas tax.
An article in the Ft. Jackson leader one time discussed how AAFES surveyed the local gas prices within proximity to the post when they set their prices. I think they tried to be .05 lower than the average within a certain number of miles.
Who’s got Diet Coke on sale for $2.00 this week?
(Ah, I should wait until after Passover to buy more anyway.)
Sorry about the double trackback. I forgot I had “auto discovery” enabled.