Why Bob’s Gas is sometimes more expensive than the Chevron Station across the street. . .
When the local mom and pop station is charging more for gas than the major brands (Shell, Chevron, etc. . .), we are in what is called a price inversion. An Inversion is when the branded price of gasoline is less than the unbranded price. (Think paying more for coffee at 7-11 than Starbucks)
Some background. Gas stations in California sell a special recipe of fuel. Only a few refineries in the world are actually setup to make California gas. On a normal day, the refineries know they can sell every gallon they produce. However, when there is an unscheduled refinery problem or a natural disaster that limits the fuel available, refineries will increase the unbranded price, to insure that there is enough gasoline for their Branded gas stations, think “supply and demand” and “market share retention”.
The good news is the vast majority of diesel is distributed through people like DeWitt, so those prices rarely if ever are affected unequally the way gas prices are. In fact diesel sold at a Branded Station is almost always sold at a premium!
A few years ago we realized that price inversions for gasoline were increasingly becoming a way of life. We let many of our customers know so they could choose between service and control or price. Many of you chose control. (We are so glad you did!)
We have the ability to give you the best of both worlds: service, control, single source billing and an alternate fuel option during the sometimes steep gasoline inversion. If you would like to know when a gasoline inversion is taking place subscribe to DeWitt Petroleum on Twitter or call us for more information.