Gas Prices: Keep Your Eye on the Gap and Save
By Janis Mara, Contra Costa Times, Walnut Creek, Calif.
Jun. 27–OAKLAND — It’s bad enough that gas prices are topping $4.50 in most of the Bay Area, but wide gaps in prices, sometimes between stations on opposite corners, can cost motorists as much as 30 cents more per gallon.
Why is one Chevron station in Antioch charging $4.49 for regular gas and one in Pleasant Hill charging $4.58? It’s the same company, right? Not to mention High Street Gas and Food at the High Street exit off Interstate 880, where gas was $4.49 Thursday, across from a Shell station with gas at $4.67.
A number of factors conspire to bring this about.
“One of the biggest reasons is zone pricing, which is something the refineries set up,” said Jason Toews, a co-founder of national gas price Web site GasBuddy.com. “Gas stations pay different wholesale prices depending on what zone they’re in.”
Zone pricing is based on the cost of getting fuel from the refinery to the gas station, Toews said. It also takes into consideration what the market can bear; hence, prices for affluent neighborhoods are higher. Widely different prices on the same corner could be a quirk of zoning. The boundary line might go right down the middle of the street.
Motorists can save money just by paying attention to the prices at two gas stations across from each other.
Filling up at the Shell station on High Street Thursday, Ray Cash said he didn’t realize that High Street Gas and Food was selling gas for
19 cents less per gallon a half-block away.
“Thank you. I might go to that station now,” the San Francisco resident said. He usually takes BART and then rides his bike to work at a nearby cabinet shop and hadn’t noticed the difference in prices between the two stations.
“I’m driving my company’s van. They pay for the gas,” said Ed Matias of Oakland as he fueled up the Mi Pueblo van at the Shell station. “I have a small car and I gas it up across the street.”
In San Mateo, regular gas was selling for $4.45 a gallon at an Arco station on South Delaware Street Friday. One block away, it was $4.55 at a Shell station. In Livermore, at the corner of Stanley and Marietta, a Shell station was selling regular gas at $4.59 a gallon Friday across from an Arco with gas at $4.41. And at Hegenberger and Edes in Oakland, gas at Arco was $4.51, while the Shell across the street was charging $4.74.
Arco stations generally have the cheapest gas, because Arco doesn’t accept credit cards. Independent gas stations must pay transaction fees to the credit card companies, and then pass these fees on to motorists. Motorists can save easily 12 cents a gallon by going to Arco. The catch: To get the full benefit, pay in cash, because its ATM machines charge a fee.
The corner price gap phenomenon isn’t limited to Arco stations. On Ashby near Claremont, a full-service station across from a Valero consistently charges higher prices.
“If it’s a bedroom community, people are a bit more price-sensitive. They can’t afford to live in a house that’s closer in. So gas may be cheaper there. If there’s rich people in a neighborhood, they will pay more,” Toews said. “Also, sometimes there is competition for the refineries. There may be another branded refinery in the area they have to compete with. In some areas, the competition areas overlap and they have to be more competitive to earn business.”
Another factor: the perceived quality of the product.
“The flip side is there are people who wouldn’t buy from an independent and would go to a trusted brand like Shell,” said Michael Geeser of AAA.
“With Chevron, they market an additive, Techron, they put in their gas. So there are loyal Chevron customers who want their products and so they will stop at a Chevron before they go anywhere else. Shell has its loyal customers, too. They’re trying to capture that market as opposed to people who are just trying to find the cheapest gas they can.”
Indeed, two customers at the Shell station on High Street, Ronnor Ali and Terrence Ross of Oakland, said they use the station because Shell gas is superior.
Another factor: Those people who have Chevron and Shell credit cards and are strapped for cash find themselves not only using credit, but buying more expensive gas at those stations than if they were able to pay in cash.
Toews said many people have no idea how much gas prices vary.
“There can be a difference of 20, 30, 60 cents per gallon between gas stations. Most cities across the country have at least 30 cents’ difference between the high and low stations,” Toews said.
Currently, the lowest gas prices in the Bay Area are in Concord, with a Costco and an Arco offering gas for $4.32.
“There are actually several stations in Concord below $4.40. The highest Bay Area price is $5.21. So there’s an 89-cent-per-gallon difference,” said Toews.
Contact Janis Mara at 925-952-2671 or jmara@bayareanewsgroup.com. To find cheap Bay Area gas stations, check out the Gas Prices page at www.contracostatimes.com/gasprices.
web resources — Gasbuddy, www.gasbuddy.com — AAA: www.aaa.com/gasprices — Cheapest gas prices on your trip: www.fuelcostcalculator.com — n Contra Costa Times Gas Prices Page: www.contracostatimes.com/gasprices — MSN Autos: autos.msn.com/everyday/gasstations.aspx?zip&src=Netx
WAYS TO SAVE –Most important: Slow down — Driving 55 can save 10 percent on mileage — No jackrabbit starts — Gunning engine at green lights drains gas — Keep car maintained — Tuneups and oil changes extend mileage
video: Catch Bay Area motorists in the act of filling up at expensive gas stations right across from cheap ones. What gives?
Find the cheapest gas prices in the Bay Area and gas-saving information at our Gas Prices Page, www.contracostatimes.com/gasprices
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Copyright (c) 2008, Contra Costa Times, Walnut Creek, Calif.
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