June 7, 2022
CBS Boston recently interviewed Frédéric Brunel, Associate Professor of Marketing regarding the dramatic surge in gas prices this year.
With many drivers searching for the lowest prices near their homes, some gas stations are benefitting more from charging less. These stations have calculated that having lower gas prices can result in higher profits inside the shops for ice, scratch tickets, soda, propane, and more. While some customers believe they are being overcharged for gas and taken advantage of, Frederic disputes that interpretation, stating,
“If a station was trying to price gouge, there would be a correcting mechanism from the other stations to undermine the price gouging and use that as a way to drive more customers to their station.”
In the highly competitive gas station market, it is difficult for stations to overcharge customers and get away with it. The demand, however, varies from station to station due to the location of businesses and other gas options nearby.