(WSYR-TV) — You ask, we answer! A frequent question NewsChannel 9 has received, is gas prices. Why can prices fluctuate so drastically from one station to the next? Even worse, sometimes these stations are in close proximity to one another.
For that answer, NewsChannel 9 went to Patrick De Haan, who is the Head Petroleum Analyst for GasBuddy.
De Haan says setting prices at the pump is a complicated formula, with complex factors.
First, he says it’s the extreme volatility of the wholesale gasoline market. Wholesale prices can change one to two times a day. Most service stations buy gas every two to five days. So if a station buys high, their prices could be more than a station that purchased gas on a cheaper day.
Location is another factor. A station on a prime spot of real estate is likely paying a premium to be there. With higher taxes as well, those prices likely get passed on to us.
Lastly, different business strategies come into play. Some stations will bring down prices at the pump because they make up for it by getting you inside the store. Wholesale clubs are known to use this strategy.