ST. LOUIS (KMOV.com) – Many people throughout the St. Louis area are asking why gas prices are so wildly different in various parts of town.
One gas station in north St. Louis is as low as $3.76 a gallon, while others just miles away are hovering near $4.
Two gas stations in particular, one located at Grand and North Broadway and another in North County on Lewis and Clark, dropped their prices to$ 3.76.
The Phillips 66 on Grand and North Broadway has launched a price war against the new Philips 66 across the street, dropping prices 13 cents lower than the competition.
The owner of the gas mart says the new station across the street has been stealing a lot of customers, and had to do something to get them back.
“Sales are good but we’re not making a profit,” said manager Alen Zdrnja. “We only hope people come in the store to buy something where their profit margin is higher.”
It all raises the question: how are gas prices set?
The big chains like Quiktrip usually set the trends and the other gas stations follow.
But other factors include the amount of competition, as two competitors in a neighborhood can drive down prices and visa-versa.
Also, the further a station is from the place gasoline tankers fill up, the higher the transportation costs, which can drive up prices. And if a station fills up its underground tanks at one price and then the prices fall, they may keep their prices up so they don’t lose money.
A big reason gas prices are lower outside the metro area is because of lower taxes.
How long can the cheap prices last? Only time will tell.
Check out our St. Louis-area gas tracker.