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Why gas prices differ so much
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BY BILL FREEHLING
Many thousands of drivers will go through the Fredericksburg area this weekend as part of their Memorial Day travels. And where they stop for gas along Interstate 95 will play at least some role in how much dough they drop during the holiday weekend.
In what comes as no news flash to the region's many I-95 commuters, gas prices vary tremendously along the interstate in the Fredericksburg area--as much as 35 cents a gallon, according to AAA's Fuel Price Finder website.
For example a scan of the site late Thursday afternoon showed that the average price of a gallon of unleaded gas was $3.38 at the Thornburg exit and $3.73 at the Courthouse Road exit in Stafford County.
So why the discrepancy?
One common factor cited for price differences along I-95 is the 2 percent tax tacked onto gas in localities that belong to the Virginia Railway Express. That now includes Spotsylvania, Fredericksburg and Stafford.
But the data don't support that as a factor. For example on Thursday afternoon the gas at Thornburg, where the VRE tax applies, was 23 cents per gallon cheaper on average than at the Ladysmith exit (110), where the tax doesn't apply. And at the Kings Dominion (Exit 98), prices were among the highest in the region.
So what are the factors that influence gas prices? We turned to Jeff Lenard of the National Association of Convenience Stores and Windy VanCuren of AAA Mid-Atlantic to help. Here are the variables they listed:
Real estate prices. Higher rents charged to convenience store merchants show up at the pump.
Amount of competition. Stations can't get away with charging a lot more than their neighbors. But when there are no neighbors, it's a lot easier to jack up prices.
Type of fuel used, including summer or winter blend.
The type of convenience store. Stations that focus mostly on selling soda, chips and other items will often keep their gas prices lower and make their money in the store.
Volume of sales. Stations that sell more gas may be able to lower prices.
Bill Freehling: 540/374-5405