Gas prices fluctuate
Published 7:16 pm Thursday, August 23, 2007
Prices of the liquid that propels American people across highways and byways varies in prices, depending on where drivers live.
Those variances in price are attributed to a plethora of factors, such as local and state taxes and marketing and merchant prices.
The price paid for a gallon of gas goes to about four sets of pockets. As of Monday 50 percent of the price of a gallon of gas goes to the crude oil supplier, 23 percent funds refining costs, 14 percent is used in marketing and distribution and the final 13 percent is what federal, state and local governments get for their taxes. Those percentages vary regularly throughout the year.
Laurie Falter, Oil Industry Economist for the Energy Information Administration, said the location of a city or town can determine how much gas will cost in those areas.
The farther a town or city is from Louisiana and Texas refineries, the more customers will have to pay for that gas.
Calls by the Picayune Item Tuesday to price gas from the Mississippi Gulf Coast to Jackson found that prices actually got cheaper the farther north stations were located in the state. All prices are for regular unleaded, 87 octane. Tuesday the average price of a gallon of gas was $2.75.
The cheapest station in Picayune was Murphy’s where $2.69 will buy a gallon of gas. The Chevron and Exxon stations on Memorial Boulevard had the highest prices on gas, $2.79 a gallon. By Wednesday those prices had dropped by about four cents a gallon.
The average on the coast, in the communities of Kiln and Waveland, was $2.76 a gallon. Poplarville has the cheapest gas in Pearl River County. Hall’s Service station on Main Street was selling a gallon for $2.66 a gallon. In Bogalusa gas is priced at an average of $2.62 a gallon. Jackson had the cheapest average on a gallon of gas, $2.45 a gallon. The highest priced gas stations found in Jackson were selling a gallon of gas for $2.71. All of those prices were also as of Tuesday.
Falter said the reason for the cheaper prices in Jackson could be that there is more competition in that city, since it is larger than municipalities in Pearl River County. Competition by neighboring stations can bring gas prices down, Falter said. If one station lowers their price by five cents and begins to gain business then other stations may lower their price as well.
“The guy across the street is going to feel pressure to lower his price,” Falter said.
Another aspect prompting variances in prices employs name brands.
Stations without name brands can purchase cheaper gas from suppliers after shopping around while name brand stations have agreements with distributors to purchase their gas, keeping them from shopping for cheaper prices, Falter said.
However even if gas is a few cents cheaper across the street some motorists will still go to their usual station.
“There is a convenience factor when filling up,” Falter said.
Jonathan Cogan, Public Relations for the Energy Information Administration said higher volume gas stations can sell their fuel at cheaper prices, while others may drop prices to draw customers into their stores to purchase more profitable convenience store items.
In high population concentration areas, such as California, the fuel used there has stricter regulations to keep pollution down. Those regulations push the cost of gas up to an average of five cents more a gallon, Falter said. Even with the rise in fuel prices Falter said the EIA still sees an increase in the use and demand of fuel.
Annually the price of gas goes up about one and a half percent to two percent.