Secret Formulas Set the Prices For Gasoline

2 Pages 618 Words

SECRET FORMULAS SET THE PRICES FOR GASOLINE

In the article “Secret Formulas Set the Prices For Gasoline,” written by Alexei Barrionuevo, states that there are pricing discriminations within different areas of states and cities. This kind of pricing is called zone pricing, and it had caused many dislikes among the consumers of gasoline. Zone pricing, is common practice that oil companies used to boost up their profits. These companies charge dealers of gasoline stations different wholesale prices based on secret formulas that varies in different locations. For example, consumers of Potomac, Md. had to pay 26 cents more for a gallon of gas at Bill& Mitch’s Exxon station than at Exxon stations in Southern Maryland. As an executive director of Service Station Dealers of America stated, “zoning pricing in Maryland has gotten completely out of whack.” Moreover, many gasoline dealers were angry because they were being charged too much from the gasoline terminals, hence caused their gasoline prices to go up because of their locations. This would hurt these dealers because many different gas stations would charge lower gasoline prices, which caused attractions to consumers. For many years, states like California, Oregon, Connecticut and Maryland are trying to make zone pricing illegal in their states. Zone pricing. At the present, many states are still trying to win cases against zone pricing in order to satisfy gasoline consumers and dealerships with fair low prices.
Throughout the past few years, gasoline prices had increased dramatically. Gas prices from Shell, Chevron and 76 had increased up to more than $1.90 for a gallon of regular unleaded and $2.30 for premium. This is just an average at some of the places around San Jose, Ca., but as for places like Cupertino, gas prices were even higher than San Jose. Many different gas stations around the San Jose area all had different prices. For example, the Shell sta...