What Were (or Are) They Thinking?

Don’t some things in life just make you scratch your head and wonder in amazement? They are not necessarily things to dwell on long-term, but just enough to wonder why.

So each time I drive on the Palisades Parkway between New York and New Jersey I pass this quaint gas station just on the New York side of the border. It actually is a lovely spot to pull over and relax. There is a park and ride located there, which is convenient for some car-pooling. There is what appears to be a nice convenient store there too. Oh, and of course, there are gas pumps. Most times my view of the pumps is completely free from any obstacles, such as cars buying gas. The reason seems clear to me – they are and have for as long as I can remember charging far beyond what any other gas station charges. I assume they do so in the hope of bagging those who know no better as they traverse the PIP. Today’s price was $4.09.9 for a gallon of regular gas (more on that .9 later). Now, if you are traveling north, this is the last gas station to be seen for quite some time unless you get off the highway. Going south, 10 miles away is a station right towards the end (or beginning) of the PIP. There you pay $3.34.9 a gallon. Gas in New York is invariably costlier than in New Jersey due to taxes added on to the price of the gas, but .75 cents is a pretty big difference, and probably does indeed explain why the pumps have almost no paying customers at the NY station and there are always lines, even late at night at the NJ one.

In another odd twist, gas prices on highways are usually higher than prices elsewhere, due to a somewhat captive audience. But travel NJ highways, especially the Garden State Parkway, and quite often the highway has cheaper gas, especially for a name brand – all the highway stations are name brands, where off the highway typically you find cheaper gas at the no-name stations. Some will say it is all the same gas, it just comes in different trucks and you pay for the name brand advertising. Some will say otherwise. But at least in NJ you can get a decent price for your gas. And for an extra treat, while some stations, name brand or otherwise are charging different prices for cash or credit purchases, the highway stations remain same price no matter how you pay.

Not being an expert on sales and marketing I can only opine from a layman’s perspective, but me thinks there would be a whole lot more customers buying gas if the price were not astronomically high. Higher volume of purchases would likely far exceed the profit on the amount of gas they currently sell. But that is just conjecture on my end.

Lest you think they are the only one’s somewhat askew, the same day I was driving on Rt. 17 in Paramus, and passed three gas stations in a row. One brand name, one no name, and another brand name. The first station was charging 357.9 for regular. The no name, literally 100 feet away, was charging 319.9. Another 100 feet and the second brand name was charging 329.9. What was the first station thinking? You can actually see the prices from the next stations as you approach the first one. What could possibly justify paying 30-40 cents more at the first station? Just another thing to scratch your head over I suppose.

And finally, what’s the deal with all gas prices ending in .9? Wouldn’t is just be easier to round it up and call it what it is? Yes, 99.9 sounds better than $1.00, and $2.99.9 sounds better than $3.00, but come on, do we really need to keep this charade going? Or is there a real important reason for this price structure that I’m just not getting? You can actually research this online and get a ton of answers – all pointing to the same basic marketing theory. Oh how I miss the days of 29.9 cents for a gallon of gas.