Why are gas prices so high in Ames?

06_CY

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Apr 11, 2006
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Filled up for $3.139 today at DSM QT. Get to WDM and it's still $3.39 nearest my house.
 

aauummm

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Yea I got the UNL88 at the Ames station a few days ago. Couldn’t believe how much cheaper it was. Kwik Star has their own supplier/distributor for the 88, maybe Thompson supplies the other blends?
The UNL88 is 15% ethanol as opposed to the E87 which is 10% ethanol. As such it gets a discount in the state gas tax to encourage it's use and also ethanol is cheaper than gasoline. UNL88 also reduces emissions over the E87, 10% ethanol mix. Generally, at Kwik Star the UNL88 has been $0.10-$0.30 per gallon cheaper than the E87 10% ethanol blend.

Unleaded 88, E15 Facts

Kwik Star UNL88
 

Cdiedrick

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I bought gas this morning in Slater for $3.39 per gallon, but when I got to Ames, everyone was selling for $3.89 per gallon. Why does it cost 50 cents more per gallon in Ames? And why does every gas station (except Sam's Club) sell for the same price. I don't think there is a monopoly, but maybe it is as simple as informal price-fixing. Is there someone in Ames who sets the price and others follow?
If you are now just making an observation like this, where have you been? This is pretty common and many areas are different. Mason City area always is cheaper than any part of the state. Not like it’s Ames but I guarantee it’s cheaper than anywhere else in the state. I just paid $3.39 on Dakota City and we are almost always higher than the DM Metro area. I always watch gas prices but never really care until they get high like they are now. I guess this just strengthens my thoughts as to how many people are the same. Figure in transportation from said pipeline aka Mason City has one and call the price increase a freight charge.
 

Agclone91

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Feb 5, 2011
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What? We have Hyvee gas, Swift Stops, Sams and now Kwik Star.
Didn't think about Hy-Vee gas, I mentioned Kwik Star and I wouldn't really consider Sam's to be a gas station since it requires a subscription. My point was that the gas market in Ames is largely held by just 2 companies so there isn't a ton of competition.
 

CyCrazy

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Dec 17, 2008
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Didn't think about Hy-Vee gas, I mentioned Kwik Star and I wouldn't really consider Sam's to be a gas station since it requires a subscription. My point was that the gas market in Ames is largely held by just 2 companies so there isn't a ton of competition.

Sams club fee pays for itself in 2 fillups. Thats legit gas station.
 
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Cyforce

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Sams club fee pays for itself in 2 fillups. Thats legit gas station.
You may want to check your math.

I know Costco in WDM is usually about a quarter cheaper than the competition. I have a 22 gallon tank. So my $55 membership requires 10 fillups at $5.50/ fillup.
 
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Agclone91

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Feb 5, 2011
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This is an odd take, Sams club isnt some elitist place. Is Target elitist to Walmart? You made a bad comparison.

I never labeled anywhere as elitist, that was all you.

If you can't see the similarity of places that require a membership vs places open to the public, then it's pretty clear our opinions aren't going to come together.
 
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SEIOWA CLONE

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It’s just higher demand lol. Higher demand leads to higher prices. It’s not some grand conspiracy lol
That may be true in macro terms, but items like gas or more regional, like the town they are in. For example, we have 3 stations to get gas here in town, a Casey's, a BP, and a local one. All prices are equal on a daily basis. Now if I drive the 17 miles to the bigger town, the gas drops 5 to 10 cents, and all the stations there are equal in price. Both the BP and Casey's stations are owned by the same company, that owns the two here in town.

Why would Casey's drop gas prices here, if the other 2 stations are charging more? They will not, when one goes up or down, the other two quickly adjust their price accordingly. Demand in the broad sense has very little to do with it. They know most people are not going to drive 10 to 20 extra miles to fuel up and save .10 cents.
 

NATEizKING

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Feb 18, 2011
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I don't know what petrol is here in Mpls area. Filled up the other day but didn't really look at the price but it was $3-something or another for the premium I put in the 20 year Boxster-mobile.
I was up in the twin cities for a wedding...3.99 everywhere
 

NATEizKING

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Feb 18, 2011
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I always remember it being a bit higher than des moines, but not the extreme differences we've seen lately.
I think part of it is the rapid decline in gas prices in general...it's been dropping heavy lately but the smaller markets still need to sell off that astronomic gas they had. Marshalltown usually lags DM by .10-15 cents but it's been .60 lately. I figure they just want their money back on that expensive gas they paid for but it will catch the lag soon.
 

madguy30

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Nov 15, 2011
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RE: college town thing, prices were going down in Madison and as far as I could tell were cheaper here than when I was back in CR/Marion area just two weeks ago.

They magically went up again this past week as UW folks started moving back.
 
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SCNCY

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RE: college town thing, prices were going down in Madison and as far as I could tell were cheaper here than when I was back in CR/Marion area just two weeks ago.

They magically went up again this past week as UW folks started moving back.

Just an FYI, the price of oil last Monday through Friday also increased as well. Looks like to start today, oil is trading at a price similar to last Monday.
 
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KidSilverhair

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It’s not “supply and demand,” it’s not that it somehow cost more to transport gasoline to Ames than it does to Slater, it’s not totally “captive college market” (although that is a factor) ... it’s a lack of real competition.

Look, in a true competitive capitalistic market, one station owner would undercut an overpriced gas market by 5 or 10 cents a gallon. That would increase their sales, making up for the lower price at the pump, and in turn put pressure on the other stations to consider their prices as they lose business to the “bargain” station.

You don’t have that situation in Ames. The stations (or the suppliers, not sure exactly where this goes) have a limited number of owners who either formally or informally cooperate to keep the price artificially high everywhere. If nobody undercuts it, they all reap the benefits, but they have to make sure nobody goes rogue and tries to start a price war.

This used to be the case in Cedar Rapids a few decades ago, too. Every gas station in town had gas at the same price, and they all moved up and down in lockstep, seemingly at the exact same time. There’s no way that could happen in a city that size without some sort of agreement, even if it was just a tacit nod of the head between the various owners. That finally changed, I don’t know why (maybe with WalMart gas stations? Maybe some station groups finally changed hands?) and now there is a variety of prices across town.

I’m visiting family in Ames this weekend, and I literally drove the 10 miles down to Slater to fill up last night. Even counting the gas I burned for the 20-mile round trip, that fill-up cost me nearly $7 less there than it would have in Ames. That’s almost criminal.
 

madguy30

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Just an FYI, the price of oil last Monday through Friday also increased as well. Looks like to start today, oil is trading at a price similar to last Monday.

Has it continued to go down in Iowa though for example?
 

t-noah

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Feb 2, 2007
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I bought gas this morning in Slater for $3.39 per gallon, but when I got to Ames, everyone was selling for $3.89 per gallon. Why does it cost 50 cents more per gallon in Ames? And why does every gas station (except Sam's Club) sell for the same price. I don't think there is a monopoly, but maybe it is as simple as informal price-fixing. Is there someone in Ames who sets the price and others follow?

Bad news for you $3.39 is high by 21 cents. Plenty of places are $3.18.
Interesting to see the country-wide, state gax tax.
For example, living in MO as I do, with .22 state gas tax, this is lower than the IA state tax of .24 - .305 per gal tax (not sure how that varies either). I should be paying 2-8 cents less per gal than my friends in IA. It doesn't always work that way. Right now, in Spgfld, MO the ave is about $3.17 - 3.27.

Right now, apparently, in IOWA, gas is ranging from about $2.95 - 3.16.

Go figure how all this works? I think stations and communities price where and what they want, often times maybe setting an 'area' price, but I can't say this for sure. There may be other costs and taxes involved also.

I'm not sure what Ames is going for at the moment.
 

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