Ideal Business Consultants

STURGIS, Mich. — A few gas stations in our area have some of the cheapest fuel in the country. 

Three stations in Sturgis, Michigan are selling gas at $3.24 per gallon. So how are they able to do it?

Two Admiral stations and one Speedway station have the price for regular unleaded at $3.24, nearly 50 cents a gallon cheaper than almost every other station in the area.

“I wanted to be sure to fill up here before I got to Elkhart, because I don’t believe it’s that price there,” Cindy Mann said as she filled up at the Admiral station on West Chicago Street.

The prices caused constant in-and-out traffic with lines of cars pouring into the streets.

“For this much money if you have to fill up, definitely worth the line,” Beth Klemoff said as she waited in line.

“They’re losing money on each gallon of gas that they’re selling unless they’re somehow able buy gas in other parts of the country,” said Thomas Gresik, Notre Dame economic professor.

Greisk says gas stations usually only make a few cents to every gallon of gasoline sold. He says these three stations are more than likely losing money on every gallon. So why are they selling it at such cheap prices?

“One reason is that some of the stations are running a promotion,” Gresik said, “The other possibility is that there could actually be a price war between the stations where one or more of the stations is trying to force out or weaken some of the other stations.”

Which he says does benefits customers right now.  But in the future, less competition could mean higher prices.

The gas stations have been at around $3.24 for the past two weeks. Gresik says it’s going to be hard to maintain those low prices for a long time.

Gresik points out that just in South Bend there can be a 10 to 15 cents difference at gas stations throughout town. He says that is a new phenomenon cause by people not shopping for the best prices, but if people started shopping around more it would force gas stations to keep their prices as low as possible.

GasBuddy.com says, the national average was $3.69 as of Monday afternoon. In Michigan, it’s $3.71. In Indiana, it’s $3.68.

Similar Posts:

• Michigan jobless rate drops steeply to 11.7 percent, lowest rate in nearly two years
• Fair Fuel UK Campaign set up to halt duty rises
• Treasury prices lower on easing Europe worries
• General Mills’ 3Q profit dips slightly, in line with expectations
• Gas Prices Expected to … Drop