Competition Leads to Wide Differences in Gas Prices

Posted on June 30, 2016
Author Michael Gallenberger, WKVI 

Gas prices have been heading down over the past few weeks, but the drop’s been more noticeable in some places than others. As of Wednesday, GasBuddy.com was reporting prices of $2.19 per gallon or lower in places like Plymouth and Hamlet, but about 20 cents higher in Knox and Culver.

GasBuddy.com Senior Petroleum Analyst Patrick DeHaan attributes these price differences to some old-fashioned competition between gas stations that’s currently being seen in many parts of the state. “These stations are engaging in what we would call a price war,” he says. “Stations are hesitant to sell at a loss in other areas and don’t want to match those loss-leader prices, and that’s probably what’s happening, is one community may have a station or several that are engaging in a price war and another community may not.”

DeHaan says that some gas stations in Central Indiana and elsewhere have prices below two dollars a gallon, but he adds that others may be hesitant to follow, “At those levels, stations are probably not making any money, and so other retailers may not really want to go down that low, in light of the fact that some stations are either breaking even or losing money, even.”

On average, GasBuddy.com reports that Indiana gas prices are down more than 16 cents per gallon from last week.