“I told them gas is too expensive; I can’t afford to buy it right now,” he explains to CBS Sacramento.
When he turned them back on, he made the decision to drop the price and lose money on gas in the hopes that customers would make up the difference by buying the cigarettes, beverages, snacks and other stuff he sells inside the station.
In the two months since the owner opened this location, he says the wholesale price of gas has increased by more than a dollar. In one night, it jumped up by a whopping $.40 per gallon.
“I can’t afford to pay no bills right now,” he says. “If this is going to keep like that, we are going to have to close the doors.”
Though other stations in the area have lower prices on gas, one owner tells CBS that he’ll likely have to raise prices the next time he fills up the tanks at his station.
It’s situations like this that often lead to gouging. Once the wholesale price of gas decreases, many stations will keep their prices artificially inflated to make the profit they missed out on while wholesale prices were high. It’s often only market competition that leads to a price drop in times of price gouging, as one or more owners will decide to drop prices in order to attract more customers.