Gas Prices and Dodge’s Store
Something curious is happening with gas prices in my part of town.
Before the recent hurricane, gas prices had gone down to $3.26/gal. The hurricane pushed prices up to about $4.10/gal, and many stations were without gas for several weeks. Every station now has gas, and prices have dropped all week, from $3.89 on Monday to $3.19 last night.
One station, though, has been selling gas at cut rates for over a week. When gas was at $4.10, they were selling for $3.56; when gas was at $3.59, they were selling at $2.92. Of course, the cars have been lined up by the dozens, and we’ve had to wait five to fifteen minutes in traffic every day going home.
I’m not sure why the store is offering gas at prices so far below the going rate. They certainly are getting a lot of customers, but I doubt that they are that profitable. The station has run out of gas several times this week; it was out this morning. Perhaps they’re trying to get back customers that they lost during the two weeks they were out of gas, or perhaps they’re trying to put neighboring gas stations out of business.
Any ideas?
Posted 9 Oct. 2008 at 7:21 pm | Permalink
No ideas, but our gas is doing the same thing. Some of the stations around here went from $3.69 to $3.29. Some stations never went over $4.00 around the time of the hurricane.
Posted 9 Oct. 2008 at 7:40 pm | Permalink
I can update Mel’s comment to observe that I saw gas in Christiansburg for $3.05 this evening. It’s been in freefall here. (Not that I’m complaining…)
Like you suggest, there are several stations around here that are regularly $.10 cheaper. I think some of them are cheaper because the gas is 10% ethanol.
Perhaps the plummeting oil prices will help keep the gas down. Between the drop in price per barrel and the strengthening dollar, we might actually get some relief.
Posted 10 Oct. 2008 at 7:36 am | Permalink
Has the man in the big chicken suit been out front recently? His appearance always seemed to signal lower prices.
Posted 10 Oct. 2008 at 10:10 am | Permalink
I wonder if this week’s rate cuts could be a reaction to the credit crunch (although it seems a bit early for it). Stations often sign contracts which force them to sell a specific number of gallons in order to avoid financial penalties. Perhaps the credit crunch took such a bite out of fuel demand that local stations are scrambling to attract consumers through surprising rate cuts (and chicken suits, of course). Just a guess…
Posted 16 Oct. 2008 at 3:36 pm | Permalink
Gas stations derive a substantial portion of their profits from the stuff they sell in the convenience store rather than from the gasoline. My guess is the owner was using gas as a loss leader to attract customers to the goodies in the store.
http://www.npr.org/templates/story/story.php?storyId=10733468