Posted December 3, 2021
As the price of gasoline continues to rise across the country, some consumers are paying closer attention to the noticeable differences in price between individual gas stations in nearby towns.
Gasoline in River Falls has hovered around $3.29 per gallon in recent weeks. While this is consistent with prices in Hudson, stations in nearby towns such as Prescott and Ellsworth offer gasoline at a markedly cheaper rate. For example, gasoline in Prescott recently could be purchased for $3.19 per gallon, a full 10-cent difference.
The profit margin for gasoline is often slim, yet with some room for local competition. According to the National Association of Convenience Stores, the average profit margin on gasoline from 2013-2018 was 23.8 cents per gallon.
According to Jordan Hedges, a Kwik Trip customer service representative, the cost of transporting gasoline is not usually a factor in small price differences between stations in nearby markets. Towns such as Ellsworth, Prescott and River Falls are priced together for transport, and pricing competition from stations within the immediate area is what usually accounts for the small price differences, said Hedges.
Hannah Mae, a customer service representative for Shell Gasoline, offered similar insight into local variations in gasoline prices. According to Mae, operators of Shell-branded gasoline stations are independent business owners who make their own decisions regarding the street price of gasoline at their location. Factoring in direct competition from stations in the immediate vicinity is generally what accounts for small differences in pricing between nearby towns, said Mae.
According to the Holiday Stationstores Customer Experience Team, the volume of gasoline sold in a specific market can also have an impact on pricing, as stations who sell a higher volume of gasoline can often offer lower prices to their customers. The Holiday Stationstores Customer Experience Team also noted the importance of pricing competitively within the immediate area.