Quite often gas station owners get asked questions about fluctuating fuel prices by customers. For instance: What causes gasoline prices to increase during summer? Why are fuel prices higher at your gas station than gas stations in other areas?
Answering such questions in a convincing way can sometimes be challenging. And if customers don’t receive a convincing reply from you, they may think you’re charging them unfairly.
So, how do you explain fluctuating gas prices to your gas station customers?
What causes gasoline prices to increase during summer?
The main reason why fuel prices fluctuate is that the cost of crude oil tends to fluctuate in the international market year-round.
What causes the cost of crude oil to fluctuate in the international market?
The price of crude oil fluctuates because of the fluctuations in the global supply and demand of crude oil.
But what causes gasoline prices to increase every summer?
There are two reasons for that.
First, most refineries shut down for maintenance during the spring-summer time. This can lead to reduced fuel production which translates to higher fuel prices.
The second reason is summer fuel blends are costlier to produce than winter blends because they have to be produced with reduced-smog formulations. This higher cost of production pushes up the price of gasoline in summer.
Why are fuel prices higher at my gas station than gas stations in other areas?
Fuel prices also vary by area so gas stations in certain areas may sell fuel at a higher price than gas stations in other areas.
This can be explained in three ways:
- Higher local state fuel taxes
- State-specified use of special blends (such as RFG) which makesfuel procurement expensive for gas stations
- Gas stations located further away from refineries find fuel purchases more expensive than gas stations located closer to refineries.
Educating your gas station customers is the key to retaining them. It’s an important element of customer service which you must not ignore.
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