When there are multiple gas stations in close proximity, what causes the difference in price?

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Drove past three within half a mile of one another this morning. The small, no name gas station was 27 cents cheaper than the Shell and Quick Chek.

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6 Answers

Anonymous 0 Comments

Usually due to franchising and monopolisation.

The big name stations are usually owned by a franchisee who wants to make a profit on their investment as they can only buy the gas from the franchisor for a certain price.

They then price based on profit margins so a station with a higher customer number will be more likely to charge less as they can still turn a profit.

The smaller noname place is not stuck buying from the one place so can negotiate and look around for better prices so can charge the customers less.

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