Gas prices have been high this year, but people notice sometimes it can be cheap at one gas station but not at another.
With the prices being so high still, drivers are shopping around at gas stations throughout their towns or cities.
People will go out of their way to hit a gas station just down the street if it saves them money for each gallon of gas.
Why are gas prices cheaper at one gas station compared to another?
According to My Twin Tiers, there are a few reasons why gas prices differ between gas stations. These include taxes, wholesale prices, and profit margins.
With taxes, gas stations are required to charge the federal gas excise tax. Right now that is about $0.18. In addition, there are state fees and taxes as well.
California has a gas tax as high as $0.86. Alaska’s is the lowest at $0.33. The amount of gas tax can change in each city and town as well. This means if you’re close to the border of a city, one gas station may be cheaper just down the street from another.
Gas stations also purchase gas themselves from a wholesale seller. This means what they pay for the gas themselves is a factor involved in what they decide to charge in gas prices.
Gas stations don’t make a major profit from selling gas, but some people develop favorite gas stations based on their reputation.
The more gas a company sells, the better price they get when it comes to buying in wholesale. Gas stations with convenience stores attached are likely able to sell gas at a lower price to consumers because they make money from sales.
There isn’t one good reason that gas stations sell cheaper gas than others, but instead many other little reasons.
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Samantha edits our personal finance and consumer news section. Have a question or lead? Send it to [email protected].