Sherlock strikes again
Friday, July 25th, 2008 By James Nesbitt
This just in from the Enquirer—competition lowers prices! Say it ain’t so, Sherlock!
The more stations competing nearby for your business, the less you pay.
An Enquirer analysis of daily sales at 716 area gas stations in May and June found that regular, unleaded fuel was about a penny-a-gallon less at stations with at least one competitor within one mile, compared to stations with rivals farther away.
Competition lowers prices by a penny? Our super sleuths must have missed a few clues to come up with that analysis. One can hardly call a study comparing gas prices based on stations’ relative distance from one another an analysis of the effects of competition. I’ll crawl out on a limb here and suggest that prices would go up by more than a few pennies if competition were removed from our system. If you are looking for some more hard-hitting, in-depth analyses from the Enquirer, it’s your week—today, the sage advice is not to drive too far out of your way to save a few pennies, because…it uses up gas in your tank that you already purchased to get there. (For the Enquirer crowd: That would mean it offsets your savings from the lower pump price.) Look forward to the culmination of “gas analysis” week at the Enquirer in Sunday’s edition, which will contain a special report on the “rapidly changing gas market.” It promises to be equally enlightening.
Tags: Competition
