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Understanding Gas Price Moves

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According to one of the co-founders of gasbuddy.com, there’s a dominant gas station brand in every area and it’s typically owned by the company that has the refinery in that region. That dominant brand is the one that sets the price at its stations and their competitors simply match it. It’s in line with “Extreme Saver” (of CNNMoney’s series) Clare Cheesman’s experience. She says that she “buy[s gas] in the middle of the week. Monday’s are bad. If it goes down it will be on a Tuesday, Wednesday or Thursday.” It’s good information to know (that competitors will lag the dominant brand) but Clare may be reaching the wrong conclusions with it.

I think there are so many x-factors when it comes to the price of gasoline in a particular area that this strategy can easily backfire. I blogged about how I go to an Exxon by a Costco because Costco drives down the price (and I can use my 5% cashback at Exxon), but there is a newly opened BP station that has the best prices because it’s trying to capture market share in the area. Finally, you have state or local laws that come in to play such as now the New Jersey Turnpike’s gas stations can only adjust their prices once a week.

So, I wonder how many times Clare has waited to buy gasoline only to find that the price as spiked?

{ 3 comments, please add your thoughts now! }

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3 Responses to “Understanding Gas Price Moves”

  1. Jim S. says:

    I don’t know about other areas of the country, but at the convenience store I work part-time (in a plains city) we usually tend to follow the lead of other stations, trying to match the lowest of the competition. But this isn’t the case 100% of the time. Sometimes, if we see we’re losing money or making far too little profit, we’ll go up in price, usually leading the competition to raise theirs as well. And the day of the week doesn’t really matter. I’ve changed gas prices myself 3 times on a Saturday.

  2. Star Money Articles for the Week of May 1

    Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: AllFinancialMatters asks how many indexes do we need? MightyBargainHunter tells us that the parent company of the nation’s largest sub-prime mortgage lender i…

  3. Steven says:

    Gas Is Gas.. There is little difference between brands.. Buy anywhere you need to, Don’t waste your time. Oil by law is all refined the same way. The additives that a company may or may not add to fuel is no better than anyone elses.. It is just gas… Buy it when you need to !!! It is just like bottled water, it is just water !!! Don’t be taken in by some sales pitch…
    There are absolutely no magic potions for gas or water… Keep your engine healthy your car will run better, keep your body healthy it will run better.

    Again water is water and gas is gas… On the open market gas is bought and sold many times a month.. The mixture is hilarious… Just buy gas !!!


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