Question about gas prices......?

Question

I was traveling and I noticed that gas in Beverly Hills was $5.25 a gallon. On the news they said gas was about $4.06 nationwide. Where I live gas is $3.89 a gallon.

My question is, what makes the gas different prices in different towns. Does the gas station it's self chose the price, or do gas stations in different towns get charged different prices for the fuel. Why is it $5.25 in CA and $4.00 everywhere else?

Answer 1

I'm not sure I can answer your question, but I'm sure glad I live here in Missouri, just south of Kansas City... gas was $3.83 yesterday.

I'm heading to Arkansas for a family reunion this morning, so I'm curious to see what gas is like along the way.  I know that for some reason we are the lowest in the western part of Missouri so it will be interesting to see what we find along the way.

Answer 2

Gas prices are different because of state taxes and formulations. Hi-test sells for 4.24 a gallon and we have state taxes of 5.8% here in Massachusetts but I have been to California a few times and have noticed that the state taxes there above 8%. That’s extreme dude. The first guy had it right about the formulations. Refineries can only produce certain amounts of formulations which makes it hard to supply enough gas. This makes it hard to make 40 or so different flavors of gas and keep the gas-stations supplied all the time when demand for it get high. I vehemently disagree with this policy, because it does make it more expensive to produce these flavors of gasoline for your automobile. Imagine only one formula of gas, and how simple it would make things. It would instantly lower prices, and be good for the consumer pocket book or wallet.

But like everything the stupid liberal do. They would spare no expense in making all those flavors all in the name of global warming.

Answer 3

It's a combonation of several factors, but most of it boils down to state gas prices and restrictions. California has higher gas prices because the gasoline tax is higher than most states.

Gasloline stations don't choose the prices themsleves exactly. In order to sell gas, it needs to be at a level that people will buy, but the gas price is going to be a reflection of gas per barrel. So Beverley Hills can sell gas for 5.25 a gallon and people will pay for it because the demographics in that area allow it. But other cities aren't at the level cause there is less money; so if gas stations were to price their gasl at 5.25 per gallon, no one could afford it in that area. It also costs more to get gasline to some places than it does to otgers, so that is a contributor as well. That's all at a state level, and not everywhere in California has 5.25 per gallon. In my area in California, it's 4.48 per gallon.

Nationally, the average comes from all the gas sales and the average comes out of that. It's boils down from federal gas tax, to state gas tax, and then other factors (like an oil well blew that day), and then setting the gas at a price that people in an area will buy, high enough to make a profit but not higher than what they are willing to pay at that point.

Where gas stations have more control in price setting is the the premimum and other higher grades of gasloline. The unleaded is going to be at a minimum price.

Answer 4

California has stricter requirements on gasoline formulation than most other states.  This is an effort to reduce air pollution, which is a particular problem there.  These formulations are costlier to make.

Answer 5

Some states have higher taxes on gas thats one reason why you will see price changes.

Gas stations do set a portion of the price themselves.  Thats why you will see in premium areas gas is slightly more expensive.

In my neck of the woods the gas prices are slightly higher near the airport and in pricey neighborhoods.