Why do two HESS gas stations, 0.8miles apart, have different prices?
For several days I have noticed that prices at two HESS gas stations in NJ had prices that were inconsistent. On March 14th I toke pictures and then calculated that the price variances ranges from 1-4%, why is that? How are gas prices determined?
Why would a gas station on the same street less then one mile from each other have gas price that rage from 1-4% higher? We’re in free markets, and I like free markets, most retailers have consistent prices at store/location that are close together, right?
Here’s the details comparing two HESS Stations, 0.8Miles from each other.
The two stations are on Route 18 in East Brunswick, NJ
03/14/08 03/14/08 Diff. %
Regular $2.979 $2.999 $0.02 1%
Plus 3.099 3.179 0.08 3%
Premium 3.199 3.279 0.08 3%
Diesel 3.849 3.999 0.15 4%
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Global Musings 
March 16, 2008 at 4:34 am
Anything special about the traffic pattern? Is it more difficult for traffic going the other way to flip around to the cheaper one? Does the cheap one have longer lines, so the other one figures a bit of lost biz is worth the extra profit?
Joe
March 18, 2008 at 12:32 am
joetaxpayerblog, Station 1 is north bound and there is heavy traffic in the morning. Station 2 is South Bound (0.8miles southbound) and there is heavy traffic in the evening. I have not noticed any major line differences. Also Station 1 has a Gulf Station across the street (You just need to make a jughandle u-turn to go to the gulf Station).
It just seems that these gas prices are being picked at random, any reason to raise price works (at least that is the perception)…..
April 28, 2008 at 4:28 am
Man I wish we had gas prices like that in Washington state. Ours are almost up to 3.80
September 18, 2008 at 12:48 pm
How can you say you like a free market and ask a question like this? Why don’t you ask why A&P and FoodMart have different prices? It’s the same answer – two different owners, who set THEIR prices the way THEY want to set them. Oil companies own almost no service stations anymore. There’s little to no profit in selling gas, maybe ½¢ on the dollar. They make a large-looking dollar profit by selling millions of gallons of fuel. Independent owners own almost all gas stations these days, and buy their gas from a preferred seller.
Making matters even worse in New Jersey (and Oregon) is that your state legislature thinks you’re too stupid to know how to pump your own gas, so it’s the law that someone has to pump it for you. They don’t work for nothing, so part of the price of the gas you buy goes to pay that employee.
September 18, 2008 at 2:22 pm
Are HESS stations independently owned or company owned (I think the latter). Why are some oil companies like ExxonMobil making $10 Billion in profits per quarter?
I’m OK with windfall profits, that is capitalism. Perhaps the tax structure should be like individuals, the more you make the more you pay (this is a “good problem” to have, right?)
December 22, 2008 at 2:52 am
This same question was asked on a Charlotte, NC talk show quite sometime ago to a oil company representative who responded with several flowery answers such as rental agreements, property values and other items. The caller then asked “Why in hell are the prices of cold drinks like coke the same at both locations” ? The representatives response was silence.
January 3, 2009 at 1:25 pm
LOOK AT THIS NEWS ARTICLE: http://ydr.inyork.com/ci_11330433 It appears some Hess stations are independently owned and some are company owned. Just like Ten Thousand Villages- they have 100 stores and some are company owned and some are privately owned. Corporately owned gas stations buy more gas so they get it at a cheaper price which they can pass on to you. Also, it matters when t hey buy it. Especially now when the price of gas is dropping like a dead fly. If they bought it at a higher price, they have to pass that on to you.