How Gas Stations Set Prices - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

How Gas Stations Set Prices

Deana Perdue, Madisons Co-Owner Deana Perdue, Madisons Co-Owner

Gas prices are at a nearly two year low.... They've fallen every day for more than a month. But those falling gas prices are making it harder for independently owned gas stations to stay in business.

Today's average gas price in Amarillo is $2.29, according to AAA. That's down more than a dollar from last month's average, and down three cents from yesterday's average. With larger gas operations dominating the market and offering lower oil prices, family owned stations like madison's have trouble keeping up.

Madison Co-Owner Deana Perdue says, "As oil prices go up or down, our prices follow. So sometimes we are higher than others, sometimes we are lower." To make sure they are able to stay as competitive as possible, Madison's buys gas around 4 to 6 days in advance. The owners say it's sometimes tempting to purchase fuel at low prices in larger quantities, but their tanks can't hold that much gas, and they could end up losing money if prices go down even further.

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