Experts break down how gas pricing works

Published: Apr. 1, 2022 at 11:16 PM CDT
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BIRMINGHAM, Ala. (WBRC) - Gas prices in Alabama are slowly starting to trickle back down, averaging $3.98 as of April 1, 2022.

Officials with AAA Alabama said if you’re not conscious about where you’re filling up, it can cost you a lot more than it needs to because prices are varying.

“If you’re not careful, you’ll pay 40 cents more a gallon for gas if you’re not watching,” Clay Ingram with Alabama AAA said. “Gas stations are free to price their gasoline at any price they’d like. They can charge $100 a gallon for it if they choose to.”

What you pay for gas depends on where you pull over, because Ingram said price gouging laws are only in effect during states of emergency.

“There is no law against price gouging unless there is a state of emergency,” Ingram said. “You can’t charge more than 25 percent more for a good or services compared to the average price over the last six months.”

Allen Ehl owns Mac’s One Stop in downtown Birmingham. He said he tries to price his gas close to what it’s going for at nearby stations.

“I think it is pretty fair to be about the same,” Ehl said. “It works best for everyone who is involved.”

Ehl said he’s getting in new shipments of gas about every four days and the price he’s buying it for is changing almost every time.

“It changes prices daily,” he said. “It can go way up or way down. Five to ten cents is the norm, but one load I got, it went up twenty cents across the board. Then, the next load, I went up twenty cents. That’s two loads and I went up forty cents. I have never done that in the history that I’ve had this business.”

Ehl said many station owners will change their prices daily based on the market, but he changes his when he gets a new load in.

“I have a percentage, a margin price that I base it on no matter what,” Ehl said. “I usually try and stick with that. Whatever my margin was set at and whatever the load is, when I pump that out, if I have to make an adjustment then I will.”

Ehl said the station is busy, pumping more than 8,000 to 10,000 gallons weekly. But, he said the price of his gas doesn’t really change how many cars he sees.

“If they are getting gas here, they need gas,” he said. “They’re not saying ‘well, I can get it three cents cheaper up the street’. It’s really not an issue in this general area.”

Ehl said one way he tries to offer his customers some relief at the pump is by offering a cash price. It’s ten cents cheaper for his cash paying customers and he said many drivers opt for that to save a few bucks.


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