Sunday, July 22, 2007

Stupid Gas Station

Have you noticed that the Chevron station on 535 @ Hotel Plaza Blvd. (entrance to Disney World) in Lake Buena Vista charges well above the average asking price for a gallon of gas? Last night, the price for 87 octane was $3.37/gal. Other gas stations within a viewable range priced their gas at the normal and current rate of $2.89/gal or so. Gas inside the Disney complex is $2.82/gal, and gas in metro area today ranges between $2.79/gal and $2.95/gal. Every time I am in that area, I never see a customer getting gas at this station, because they are at the other two gas stations on the street getting gas at a more reasonable price.

Businesses have the right to charge whatever price they feel is reasonable for their services in order to gain a profit. If a customer is unwilling to pay that price for such services, then they have the capability to find cheaper services elsewhere. So, I will not be calling the gouging police anytime soon. However, why would this Chevron station feel the need to charge forty or fifty cents above neighboring stores and the local market?

If those outrageous prices are meant to throw off free-spending tourists, it is an ill-conceived business strategy inasmuch as there are other gas stations next door with lower prices. The station cannot claim that the prices are set at a premium because of the company's claim of superior products. Other Chevron stations charge a competitive price while simultaneously pushing their products as superior to Hess, Amoco, etc.

The only feasible idea as to why they charge 30-40 cents above market value would be to entice those tourists that may have gas cards or credit card-based gas purchase incentives that can only be redeemed at Chevron stations, which is the lone station of that brand in that area. However, this could not possibly bring in enough revenue to stay competitive against neighboring stations. They still need to entice that customer that is willing to stop at a random station for gas, which they do not seem to be doing effectively.

Despite the high prices and low customer rate (based on observation), this gas station remains open. It would be interesting to learn how they have been able to survive.

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