More discussion on gas prices
Jun 11, 2014 | 70 70 recommendations | email to a friend | print
To the editor:

I saw the letter in the paper and I see signs along the road saying “Gas prices are too high in Cadiz.” One letter writer questioned if it cost more to ship gas to Cadiz than the surrounding cities.

The price (within a reasonable range) of gasoline in Cadiz is determined by the gas market in Cadiz, not the cost of the fuel itself, nor the cost to get the fuel to Cadiz, nor the cost of gas in Murray, Oak Grove or anywhere else.

Suppose a local fuel transporter told one of the stations in town that they were shipping enough fuel to get a $0.25-per-gallon reduction in their fuel transportation cost. Further, suppose the station is selling all of the gas that they can procure from their supplier.

Then why should that station pass the transportation savings along to their customers?

The market price for fuel in Cadiz is determined by the demand for fuel in Cadiz. Reduce the demand enough and the price will come down. Increase the demand enough and the price will go up.

As long as the people here are willing to pay the higher price, the local stations would be crazy not to accept their money! After all, the local stations are in business to make money, not to reduce your fuel cost.

Jon Kelly, Cadiz
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