A friend and I were returning from lunch yesterday when we noticed this little item in Alexandria.
Look closely. (The answer to the riddle is past the break…)
Admittedly, it’s a little tough to see, but here is the price for the station exactly 150 feet behind the Exxon/Mobil station…
Still a little hard to read? Okay, the unleaded prices is $3.79, a 14 cent difference. Premium is $4.09, a 15 cent difference. Now, I’m not really math challenged but even that seems a little extreme to me. 14 cents per gallon difference? One hundred and fifty feet down the block?
I asked someone who knows a lot about the industry, and it turns out this isn’t all that unusual. If you are an Exxon dealer, you must buy from the Exxon fuel depot and you pay the Exxon depot price. The Liberty station owner can buy from any supplier, so they can shop around for a better price. The station owner can decide the price, but if they bought their supply at a higher price they will sell it for a higher price.
Still, it seems that Exxon is setting up this poor dealer to fail.
Enjoy the savings. And keep your eyes open.
Looks like you were driving down Franconia. I think this street, heading east from the “mixing bowl” is the top competitor wins all in the name of dealing gasoline. I find that USA Gas and Liberty always have the best deals. BP is up there right with Exxon. Usually BP is about 10 cents above Liberty, right across the street. I don’t know why people stop at BP, but they do. Maybe a survey is in order?
Actually, this was on Washington St. in Alexandria.
.47/gallon difference from the Shell station near my house in Falls Church and the WAWA near the new house in Woodbridge. Wow.
It cuts both ways. The problem for Liberty and other independent stations is during a crisis or times when gas supplies are tight they are not guaranteed delivery, as this Exxon station likely does. In a price run-up they usually end up paying more and are SOL.
That’s an interesting point. I’ve done some homework on the web, and the problem is more complicated that it looks.
If the station is independent, it can buy gasoline from any supplier. If it is branded, it buys from that branded supplier. (Yes, that means you can get Exxon gas at Liberty, even with Exxon next door.)
The price depends on the station ownership. If the station is independent, or it owned/operated but branded, the owner sets the price. If the station is company owned the company HQ sets the price for them. Check out this article: http://www.weatherplus.com/news/the-price-for-gas-how-stations.php for some details.
Think that is confusing? How about being an owner/operator who pays different wholesale prices at different stations – on the SAME day! Zone pricing? Perhaps. ( http://www.washingtonpost.com/wp-dyn/content/article/2006/08/15/AR2006081501061_pf.html ). But more likely it’s just the way the suppliers work ( http://www.washingtonpost.com/wp-dyn/content/article/2008/05/24/AR2008052401961_pf.html ).