Gas prices differences mystifying

Gas prices mystify me.

I have been traveling regularly from Tucumcari to Santa Rosa. It used to be that Santa Rosa’s gasoline prices at its three truck stops (I’m sorry, travel centers) was reliably 10 cents higher per gallon, but that’s not true any more.

If I travel back and forth regularly, every third leg, either from Tucumcari to Santa Rosa or vice versa, as I have been, I try to arrange it so I’ll buy gas in the cheaper location.

The price differential is no longer reliable, nor does it favor one community over the other.

For a few weeks it will be cheaper in Tucumcari, then it will be cheaper in Santa Rosa.

As of March 29, the difference favors Tucumcari. Gas prices at our truck, uh, travel centers and Allsups were at $2.33 a gallon, whereas in Santa Rosa it’s $2.49 per gallon.

A few weeks ago, Santa Rosa had the advantage with $2.29 vs. $2.33

Crossing the state line to Texas ushers in complete chaos in gasoline pricing. It can vary from $2.50 to $2.10 per gallon in the space of 50 miles.

The Investopedia website says the price of oil averages about 59 percent of gasoline prices. Other factors are state and federal taxes, which don’t vary that much, then refining cost and profits figure in, followed by distribution and marketing costs.

In Tucumcari, a price differential won’t last long. The Love’s and Flying J travel centers, and Allsups watch each other like hawks. Seldom will you seen any differences in gas prices there.

The same is true in Santa Rosa, where Love’s, Travel Centers of America and Pilot have large operations. Once again, the price is not going to vary among the three.

If the factors are the same, it is still a mystery why prices would fluctuate so much from one town to the next.

About 60 interstate highway miles separate the cities.

In either case, the cities are the same distance to Permian Basin drilling sites — about three hours away by car. I used to think that kept our gas prices low or reasonable, but all that oil has to go to refineries to have the gasoline refracted out of it.

So there has to be some variation in some other factors that we don’t see, like the daily fluctuations in the price per barrel of oil. Or maybe it’s refining costs. It costs more to refine heavy, sour crude than it does for light, sweet crude. The prices for the different crude types compensate for the difference in refining costs.

I’m sure the retail gasoline pricing process isn’t arbitrary. I’m sure there are pricing analysts at all of the companies who do a lot of sophisticated math, with an eye on competitors, to set gasoline prices daily.

It’s still a mystery to most of us, though. It is to me.

On March 29, the nation’s average gasoline price was about $2.65, and as long as we stay well below that in eastern New Mexico, I’ll pump away as needed.

Steve Hansen writes about our life and times from his perspective of a retired Tucumcari journalist. Contact him at:

stevenmhansen

@plateautel.net