The Blog of Harald

The Oil companies have explained that the variation in gas prices is normal. Gasoline is a commodity, and people are willing to drive a fair distance for cheap gas. So when one station lowers their price, everyone else _must_ also, or they lose all of their business. This process continues until all of the stations are losing money (by selling gas below cost), at which point head office tells them to go back to the regular price. Or something.

This doesn’t explain to me why the price varies by more than 10¢ per litre on a weekly basis, and with predictable regularity. For a while now, Monday evening has been cheap gas night all around this area; then the price goes up significantly late Monday night. It’s been so much of a pattern that it is a ritual for us to pick up the kids from school then go get cheap gas.

This week, however, they messed everything up. Sunday, it was 78¢ per litre; Monday it was down to 66 ¢ (a significant jump down, which is also unusual). Tuesday, it _dropped_ another 3 ¢, and Wednesday it was back up to 70 ¢.

So in 72 hours, gasoline prices dropped $0.15/litre, and then jumped right back up again. The Oil companies claim that the jump is due to demand, but that doesn’t explain the preceding drop. It doesn’t make any sense to me, and I no longer believe the oil companies’ facile explanation…