In a 1-mile stretch of Powerline Road in Pompano Beach, the price of gasoline jumps from $2.22 to $2.99 for a gallon of regular.
On a 10-gallon fill-up, that could cost you almost $8. But Pompano is not the only place where that’s true.
The range of gas prices in Palm Beach, Broward and Miami-Dade counties is wider than in most areas in the nation, according to an analysis of 456 metropolitan regions by price tracker GasBuddy.com.
It’s not simply a matter of finding high prices in rich neighborhoods and near airports — although that’s happening. In South Florida, prices are all over the map, with no apparent pattern. From station to station, prices are as diverse as the area itself.
In Boca Raton, for example, prices this week ranged from $2.15 to $2.97 for a gallon of regular.
Asked why he was pumping nearly $3-a-gallon gas into his truck Wednesday, Kyle Cameron of Deerfield Beach pulled the nozzle away. “Is it really that much cheaper everywhere else?” he asked.
The 28-year-old said he felt cheated, but not surprised.
“I think they’re counting on people not to be paying attention and that people just don’t feel like going out of their way to a different gas station,” he said.
Even the experts say they can only speculate as to why prices vary so widely here.
Gregg Laskoski, a senior petroleum analyst at GasBuddy, said South Florida’s high concentration of wealthy motorists and tourists may prompt station owners to charge whatever they think they can get.
Gas stations that raise prices well above the market average may be hoping consumers don’t notice, he said.
Another reason might be the large number of gas stations in the region and a wide range of operators with varying motivations, Laskoski said. For example, stations that charge 80 cents above average might not be able to afford competitive prices or might be bound by suppliers to keep prices high.
Some might have trouble replenishing their supply and actually keep prices high to limit sales, he said.
“Smarter consumers aren’t going to pay those higher prices, because they’re going to pay attention,” Laskoski said.
The GasBuddy report, titled “Cities Where You’re Most Likely to Overpay for Gas in 2016,” ranked the West Palm Beach metro area with the 40th largest price discrepancy in the country and the largest among southern states. The report, which sampled average prices from Jan. 1 to May 31, found a 57-cent gap between the highest and lowest prices.
Miami was just behind in 41st place, with a 56-cent gap. Fort Lauderdale was 98th, with a 40-cent spread. In first place was the western California region of Handford-Corcoran, with a $1.26 spread. Last place belonged to Alexander County, Ill., where all prices were the same.
Most station owners or operators contacted in South Florida declined to comment. But one who did agree to talk, Ramesh Rao, owner of a Mobil gas station in Fort Lauderdale, said he notices big price differences among his competitors.
Rao was charging $2.31 Thursday for a gallon of regular, but around the corner — on East Sunrise Boulevard — others charged 10, 20 and 30 cents more.
Rao said he can’t explain it.
Maybe it’s the fact that some stations buy branded gasoline and others don’t; some have higher expenses than others; and they all have their own business strategies, he said.
Asked about the prices in Pompano and Boca, Rao laughed and said he would love to charge that much, except that no one would pay it.
“Those people are crazy,” he said.
Ned Bowman, executive director of the Florida Petroleum Marketers and Convenience Store Association, said the price spread in South Florida may result in part from the unique costs and supply threats suppliers face here.
Because much oil comes to the market by sea, he said, the threat of inclement weather often causes volatile price changes and supply delays. Also, the Jones Act, which protects U.S. ship crews at sea, keeps prices higher in the region.
Local gas taxes also keep prices higher in South Florida than in other parts of the state, but they are about the same throughout Broward and Palm Beach counties, and so taxes don’t help to explain the disparities.
Ultimately, operators set prices that best balance their needs to cover costs and stay competitive. This can mean raising prices when necessary, Bowman said.
“But there’s really no silver bullet as to why prices go up and down,” he said.
Most operators make far more money from goods sold inside the store than at the pump, said Jeff Lenard, spokesman for the National Association of Convenience Stores.
Stations, on average, mark up gasoline about 20 cents from what they pay for it, Lenard said. Thirteen cents of that covers expenses, leaving 3 to 5 cents of profit. Where owners feel they can boost that margin, they’ll do it, he said.
In relatively wealthy areas like Boca Raton, where the median household income is $72,000, more operators will decide the market can bear higher prices compared with Fort Lauderdale and its median income of just over $48,000.
And so gas prices in Boca Raton reached $2.97 per gallon Thursday but just $2.59 in Fort Lauderdale.
In Miami, prices maxed out at $2.69, but $3.15 in Miami Beach, where the median income is about $12,000 higher. Prices also are higher in Aventura, with its $59,657 median income.
“There are retailers in these markets that recognize that a great many affluent consumers are inattentive when it comes to retail gasoline prices,” Laskoski said.
Defying convention, Pompano Beach — home of the $2.99 gallon of gas — has a median income of just over $40,000 per household. And in Weston, which boasts $90,000 in median household income, the price peak is $2.41, half a dollar cheaper than in Pompano.
Furthermore, even in cities with high median incomes, prices are just as erratic.
Laskoski said there is no single explanation to account for the price gaps. And some customers aren’t looking for one.
In Boca Raton, Jason Kirschner, 45, of Tamarac, didn’t notice or seem to care that he was paying 80 cents more than a station down the street was charging.
He shrugged. “That’s just the way it is,” he said.
Disparate gas prices
Gas prices can vary widely even within a few miles of each other. These are some credit-card prices Thursday for a gallon of regular.
Boca Raton
Valero, 1255 W. Palmetto Park Road, $2.97
Valero, 299 W. Camino Real, $2.39
Mobil, 690 Glades Road, $2.66
BP, 5440 Glades Road, $2.59
Shell, 21290 St. Andrews Blvd., $2.35.
Fort Lauderdale
Mobil, 606 N. Federal Highway, $2.31
Shell, 1420 E. Sunrise Blvd. $2.59
Shell, 880 W. Sunrise Blvd., $2.49
Sunoco, 1455 W. Sunrise Blvd., $2.25
Mobil, 1565 W. Sunrise Blvd., $2.37.
Pompano Beach
Chevron, 1231 Powerline Road, $2.99
Chevron, 301 S Pompano Parkway, $2.25
Mobil, 1481 SW 26th Ave., $3.09
Exxon, 1480 S. Pompano Parkway, $2.59
Speedway, 6191 Powerline Road, $2.19
Source: GasBuddy.com
