Expert explains ‘price volatility’ at West Michigan gas stations

Posted at 6:04 PM, Sep 23, 2014
and last updated 2014-09-23 20:11:13-04

GRAND RAPIDS, Mich. — Colder temperatures are heading our way, and while some are sad to see the summer weather go, there’s one thing to look forward to:  gas prices should start to drop soon.

However, locally a lot of people have seen just the opposite happen in the last week.

There’s not just one straightforward answer to why this is happening; instead there are several factors that determine gas prices. Ultimately, each individual gas station, whether they belong to BP or Mobil, will decide their price.

Everyone with a car needs to fill up to get themselves or their family from point A to point B, but you may not know know why prices are fluctuating several times a day.

“It’s beyond madness right now. Last week it was $3.19, now it’s $3.50. Wow,” said Crystal Hobson, a regular customer at BP.

Hobson, like thousands of others, depends on the price being reasonable so she can get her kids to school and herself to work.

“I usually can put in $20, and get half a tank; now I put in $20 and I’m just reaching a quarter tank,” she said.

There’s nothing surprising about gas prices going up, but as of Sept. 15 they should be falling because federal regulations allow winter blend gas to be allowed back into gas pumps.

“So at this time of year we see gas prices go down and it’s for a couple of reasons. We have cheaper gas being put into the market, and we have much less of a demand during the fall driving season,” said Gregg Laskoski of

Laskoski says West Michigan isn't seeing that price drop yet.

“Michigan and the entire Great Lakes region have more price volatility than any other place in the United States. You often have dominant retail chains that lead the pricing and lead competitors to increase and decrease prices,” he said.

Every gas station owner is playing a gambling game with several different factors of every minute of every day when they set gas prices.

“Well basically gas prices fluctuate every single day, so every day we get a different price. Some of the factors are holidays, and seasons. Another thing that plays out is the competitors,” said Vik Singh, the owner of the BP gas station on Division and Hall.

Singh said he’s always looking to Marathon and Speedway to see where they set their prices. He changes accordingly, sometimes up to three or four times a day.

“Gas is sold on pennies on the dollar. There’s not much money in it. We make our money inside. Gas is the number one thing we need to pull people in,” said Singh.

Laskoski says dominant gas station chains try to aggressively make up for lost profit on goods in their stores.

“They are hoping what they are losing on gas prices they are getting on beer, chips, soda,” he said.

The lowest price in Grand Rapids as of Tuesday evening is $3.38. You can find that price at Eastern gas station. They say they set it that low because they have old pumps without credit card machines on them.

They also try to stay at the low end of pricing because it brings in more customers.

There’s a 17 cent price differential between the lowest price and the highest price in Grand Rapids as of Tuesday night.