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The reasons behind drastic gasoline price fluctuations

Gas pump station
Anthony Inswasty via Wikimedia | CC BY 3.0
Gasoline pump

WGVU has been speaking with GasBuddy’s head of petroleum analysis. In part two of our discussion, we ask how the price of a gallon of gas can dramatically vary from station to station?

In Grand Rapids, with just a few miles separating them, we discovered two gas stations on the GasBuddy price map selling petrol at drastically different prices; 34-cents per gallon.

“Competition. Speedway could be going up that day? You know, there could be differences because there’s a price cycle happening and we’ve talked about those price cycles.”

Patrick DeHaan is head of petroleum analysis at GassBuddy. He’s long explained how Speedway is corporately owned and operated making it the Midwest market leader setting daily prices.

“But a lot of the time, the volatility Patrick, has been nothing short of amazing. We went down $7 Monday. We went down $2 Tuesday. We went up $7 Wednesday and we’re up $2 dollars today. The volatility, I mean, the President has said, ‘Oh, the price is unchanged.’ Yea, the price may be unchanged from three weeks ago, but it doesn’t mean that oil went up $20 and then down $20 and then up $20 and then down $20 and you have all these stations that paid a dramatically different price.”

That’s because gas stations make purchases every few days.

“There was one day Patrick, that the wholesale price of diesel went up 75-cents a gallon. The next day it went down a $1 a gallon. That’s, that’s the kind of volatility we’re dealing with. Now that’s, that’s an extremity, but that’s just a highlight.”

The instability began when economies broadly reopened as pandemic conditions improved in 2021, oil supply couldn’t keep up with demand. OPEC had allowed inventories to decline and failed to raise production fast enough to meet demand. Now, nations are imposing sanctions on Russia in response to its invasion of Ukraine, removing Russian oil from global markets.

Patrick joined WGVU Public Media in December, 2008 after eight years of investigative reporting at Grand Rapids' WOOD-TV8 and three years at WYTV News Channel 33 in Youngstown, Ohio. As News and Public Affairs Director, Patrick manages our daily radio news operation and public interest television programming. An award-winning reporter, Patrick has won multiple Michigan Associated Press Best Reporter/Anchor awards and is a three-time Academy of Television Arts & Sciences EMMY Award winner with 14 nominations.
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