Why?

[Devils Horse]

Just got back from Dayton, Oh. where I filled my tank for $3.55. It was $3.47 across at the off brand station, and prices all over the area were around $3.65 on average. I get back to good ole Bowling Green and it's $3.83. Can anyone tell me why gas is 20-32 cents a gal more expensive here? Is Key oil company gouging? I'd really like a good sensible explanation.

[jcb]

Well, here's what the government says:
Source: http://www.eia.doe.gov/bookshelf/brochures/gasolinepricesprimer/

Why are gasoline prices higher in some regions than in others?
Although price levels vary over time, Energy Information Administration (EIA) data indicate that average retail gasoline prices are often highest in certain States or regions (Figure 3). Besides taxes, there are other factors that contribute to regional and even local differences in gasoline prices:

Distance from supply – Retail gasoline prices tend to be higher with greater distance from the source of supply: ports, refineries, and pipeline and blending terminals. About 66% of the crude oil processed by U.S. refineries in 2007 was imported, with most transported by ocean tankers. The U.S. Gulf Coast is the source of about 40% of the gasoline produced in the United States and the starting point for most major gasoline pipelines.

Supply disruptions - Any event that slows or stops production of gasoline for even a short time, such as planned or unplanned refinery maintenance or the refinery shutdowns that occurred when the Hurricanes Katrina and Rita hit the Gulf Coast in 2005, can prompt bidding for available supplies. If the transportation system cannot support the fl ow of surplus supplies from one region to another, prices will remain comparatively high.

Retail competition and operating costs – Pump prices are often highest in locations with few retail gasoline stations. Even stations located close together have may have different traffic patterns, rents, and sources of supply that influence their pricing. Drivers face a trade-off between stations with high prices and the inconvenience of driving further to find a station with lower prices.

Environmental programs - Some areas of the country are required to use special “reformulated” gasoline with additives to help reduce carbon monoxide, smog, and air toxics that result when gasoline is burned or when gasoline evaporates during fueling. Other environmental programs put restrictions on fuel transportation and storage. These programs tend to add to the cost of producing, storing, and distributing gasoline. About a third of the gasoline sold in the U.S. is reformulated. Each oil company prepares its own formulation to meet Federal emission standards.