You asked: Quantity, location, market determine gas prices
Published 10:03 am Saturday, September 3, 2011
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You asked: Why are gas prices in the Petersburg area lower than Western Tidewater?
FRANKLIN—Three main factors help fuel distributors determine the cost of gasoline in an area before it even reaches store pumps.
Quantity, location and market are all factors distributors look at when determining the price a consumer will pay at the pump, said Clarence C. Hucks, manager of Southern States Cooperative in Windsor.
Some or all of those factors could play a part in why gas prices seem to be cheaper in the Petersburg area than right here in Western Tidewater. The cheapest gas in Petersburg, according to richmondgasprices.com, was $3.29 a gallon on Friday. While the cheapest gas in Franklin, according to virginiagasprices.com, was $3.43 a gallon.
One reason for the difference in price is quantity. Smaller stations that deal with a smaller consumer base tend to spend more on gas on average.
“The more you buy the cheaper the price,” Hucks said.
Supply costs could also be a factor in the price difference, Hucks said. The Richmond – Petersburg area has about double the suppliers that our local area does, making transportation costs higher for some local stations.
“Freight can become a factor in the price,” Hucks said.
Hucks said corporate offices set the prices at branded corporate stations in the area and local stores are at their mercy.
Location is also an important factor. Stores near a highway will have higher gas prices than those off of the highway.
Vickie Ricks, owner of Vickie’s Country Store in Courtland, said a local supplier sets her price. She said Parker Oil Company sets the price.
Tourism could be another reason for the price difference as well. Ricks said she has had a lot of out-of-town business this summer.
“They have been here from as far away as Maine and everywhere else in the world,” Ricks said. “I’ve done well with fuel.”