Gas prices vary depending on competition

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Driving in the Five Towns and on Nassau County’s South Shore could have motorists scratching their heads about why gasoline prices vary so much in the communities they pass through.

At the Sunoco in Hewlett at the intersection of Mill Road and Peninsula Boulevard the price for regular gas was $2.65 per gallon for self service as of Sept. 17. It was reported down six cents as of last Friday on longislandgasprices.com.

On Burnside Avenue in Inwood, the Mobil had regular gas for $2.59 per gallon; at the Speedway on the corner of Burnside Avenue and Doughty Boulevard, also in Inwood, gas was $2.55 for regular. The Global station on Rockaway Turnpike in Cedarhurst had it at $2.55, but Shell, also on Rockaway Turnpike in Cedarhurst, priced it at 2.79, while the BP on Broadway in Hewlett regular gas was $2.59. All those prices were as of Sept. 17.

Along Sunrise Highway from Lynbrook to Merrick gas process varied from $2.32 at a Citgo in Rockville Centre; several at $2.49 in Lynbrook to $2.29 in Baldwin back up to $2.59 in Merrick.

Why such a difference?

“The main thing in my experience as both a pricing analyst and as simply an analyst is the competitor set in a given five-mile area,” said Jeff Pelton, a senior petroleum analyst for gasbuddy.com. “That competitors set and their alpha competitor strategy set the pricing landscape.”

Pelton said that to have less expensive gas prices it is good for one of the warehouse stores — Costco, BJ’s or Sam’s Club — to be in that area. “Their pricing model on fuel is who cares, it is looked at as the cherry on top for their customers,” he said. “They will at times sell at a loss.” Gas at these stores is about 10 cents lower than at other stations.

Regional providers such as Speedway (formerly Hess), East Coast (formerly Wawa), Sheets in Pennsylvania and Murphys in Florida, offer appealing prices, Pelton said, “Because their [business] models are also built on driving store traffic, not quite to the degree of  the big-box retailers, but within three to five cents.”

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