Article found at:
In this article, the author loosely tries to explain how the price of gas is determined, and why the price will vary from place to place. The example used in the article is in California in 2012, when Michael Denis paid $4.69/gallon and 4 miles away Lupe Alfaro only had to pay $3.89/ gallon. The difference comes, "because fuel refiners charge unequal amounts to service station dealers in separate areas based on a host of closely guarded factors, such as nearby competition, traffic volume and station amenities." The writer essentially calls gasoline pricing a conspiracy designed to hurt consumers in a way that retail stores do not. His example is that sweaters in a chain's stores will always have similar pricing.
Gas stations operate at a level approaching pure competition. The barriers to entry are low, and if they do not function at the market level, then they will not sell and they will go out of business. They are price-takers. The distributor sells to the highest bidder, depending on demand, and then the local gas stations can only put out the product at the market price. These stations might have a chain name, but they are normally independent franchises and are constrained by demand as much as the next. If consumers are willing to shop around and choose cheaper locations, then prices will have to change to accommodate. The market drives these factors, it is not some large business conspiracy that is bent on sucking extra profit out of the consumer.