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Friday, June 3, 2011

DC Area Gas Price Gouging?

I live in Northern Virginia, and regularly travel to southwestern Virginia down Interstate 81.  When gas prices have been stable for a while, the price differential is about 15 cents per gallon, i.e. DC area gas prices are about 15 cents higher than those at I-81, exit 291.  Roanoke typically has the cheapest gas, often about 20 cents cheaper than DC area.  I don't know the reason for that differential, but I've gotten used to it and accept it. 

But here's where I see a problem.  Every time we find ourselves in a period of wildly fluctuating gas prices, the differential increases, especially when oil prices are falling.  Recent example:  after a significant run-up in oil prices in Spring 2011, there was a dramatic drop.  During the run-up, gas prices everywhere exceeded 4 dollars a gallon, and I observed the 15-20 cent differential described above.  But when oil prices went down again, prices in the DC area stayed relatively high, compared to elsewhere in VA.  On the Friday before Memorial Day, DC area gas prices were still $3.97 a gallon or more.  But on I-81, it was $3.65 per gallon.  And in Roanoke, it was $3.45 a gallon. And this seems to have been the case for several weeks.

I'd be very interested to hear the reasons.

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