Sunday, 1 September 2013

BC Gas Prices Synchonize Mysteriously

In BC, every pump in town posts the same price.  The price is rock steady from dawn to dusk.  When change comes here, it spreads from downtown Victoria to the tip of the Peninsula in less than an hour.   Every gas retailer from the corner shack to a gleaming ten pump palace knows the cost of their operation to four significant figures (e.g. 135.9)  and that cost turns out to be exactly the same for each of them.  I struggle with the vagaries of my own sales to know the costs to two significant figures.  There's no way on earth they are one hundred times more accurate running their business.  If you want a different price, you have to drive to a different community.

Having lived in Ottawa for a time, I was surprised to see different prices depending on which station, what day of the week and even what time of day.   Back in BC, I don't feel we are being ripped off at the pumps. The prices are low relative to Europe. But what the heck is going on?

Granted, retailers copycat prices from competitors, or phone to see what's up, and some change because they have the same owner.  That doesn't explain lock-step changes nor the speed.

On-line, most of the explanations are of the "nothing to see here" type from agencies and brands who want the industry to look good.  The crowd behaviour by both sellers and buyers just isn't explained.        

Gas is more competitive than some products because drivers can shift in seconds between several stores, depending how low the tank is. What we get at either station, apart from the welcome, will burn about the same.

Weak stores get higher prices than their investment and service deserve.  Strong stores make up for it because brand name and investment bring higher volumes.

Any ideas?  (The pictures were taken in a four mile radius).
And no, not every pump is always priced the same.  But it's darn close and even a small independent like FasGas takes part.

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