BAKERSFIELD, Calif. (KERO) — Last week, I told you gas prices were dropping, with some stations falling below $3.50 a gallon. But just a few blocks away, drivers are still paying $4.50 or more.
So I looked into the age-old question: Why do gas prices vary so much from station to station?
I spoke off camera with Chad Hathaway, the founder of Hathaway LLC, an oil and natural gas company based in Kern County. Hathaway says that many of the big costs behind gas prices don't actually change much.
According to Hathaway, wholesale fuel prices are fairly uniform. Taxes are the same, no matter which station you visit.
So what causes the big swings at the pump? Hathaway says it comes down to the station owner.
He explains that about 95% of gas stations in California are independently owned, and those owners get to decide how big a margin they want to charge.
"Especially remotely, these people can add as much as $1-$2 per gallon because they're the only people around. That especially hurts farm workers and people who live rurally," Hathaway said.
Meanwhile, Hathaway points out, the price of oil per barrel is published daily, set by a global market, not by local stations.
He adds that refineries are heavily regulated and scrutinized, which he says is one reason some have left the state.
But at the retail level, Hathaway says independent station owners are largely unchecked, and that's where drivers see the biggest differences at the pump.
So the next time you see a big price gap from one corner to the next, Hathaway says it's not necessarily about oil prices or taxes. It's about how much the station owner decides to charge.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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