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You Ask, We Answer: Why are gas prices different in different areas?

You ask we answer

EAU CLAIRE (WQOW) - A number of viewers have asked about gas prices and why they might be higher or lower in different towns or even just different neighborhoods.

For example, if you drove down Clairemont in Eau Claire Sunday afternoon, you'd find prices at $2.29 on the Northern portion, but six cents lower at the Southern portion of the avenue. This is because of a difference in competition, according to Patrick De Haan, head of petroleum analysis with GasBuddy.

He said when there is a higher density of gas stations in an area prices can be driven down because they are competing with one another. Or, when a new station opens it will undercut the local competition to bring in new customers.

While the price of actual gas is based on the cost of oil, the price you see at the pump is largely based on what every station around is already charging.

"If you're the only gas station in town, you're not going to be as competitive because there's no one egging you on to lower your price and that's why it really comes down to consumers being aware of what stations are charging and shopping around," De Haan said. "Because the only golden rule to gas prices is that there is no golden rule."


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Felicity Bosk

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