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Tuesday, December 02, 2008

Northwest Side gas-price mystery a head-scratcher

I set out Monday to solve the great gas-price mystery on the Northwest Side.

Since the middle of the summer, those who've driven through the intersection of Irving Park and Pulaski Roads regularly, as I do, have probably been struck by the staggeringly high gas prices at the Shell mini-mart on the northwest corner.

How high? Sometimes a dollar per gallon higher than the price at the Mobil mini-mart just across Pulaski and higher than any other price in the city or suburbs. So high it was rare to see a customer at the pumps.

"I've been scratching my head about it just like everyone else," said the local alderman, Margaret Laurino (39th). "If I ever see a car there, I wonder what the driver's thinking."

The average price for a gallon of regular in the Chicago area Monday was $1.83, according to AAA. The Mobil station at Irving and Pulaski was selling it for $2. The Shell at North Avenue and LaSalle Street, traditionally one of the priciest gas stations in the continental U.S., was charging $2.36.

The Irving/Pulaski Shell? $2.80.

I live nearby, and the most popular theory among the neighbors is that the same man owns both stations and is using asymmetrical pricing to drive customer traffic to the Mobil, which was remodeled this year to include a sandwich counter and a doughnut franchise.

This makes no sense to me. I went to ask the owner—Ron Keaton, according to city records—but the clerk on duty said he had no way of passing along a message to Keaton. Shell Oil Co.'s Houston-based media relations coordinator Robin Lebovitz couldn't track him down either.

The closest I was able to get, again with the help of city records, was Keaton's brother's assistant, Mike Duffy. Duffy, who works at the Mobil on the other corner, was glad I called. He said he wanted to clear up rumors on the Internet that the Shell station is a shell operation—that its prices are absurdly high to keep gasoline customers away from what is actually some sort of illicit business.

"It's just basic economics," Duffy said. He said Shell's distributors are charging Ron Keaton significantly higher wholesale prices than the distributors who are selling to Keaton's brother Roger, who owns the Mobil.

The brothers are not in collusion, Duffy said (though Roger Keaton once told the neighborhood association that he manages both properties). It's simply that Shell, for its own reasons, wants to drive Ron Keaton out of business.

That makes no sense to me, either. And Shell says it isn't true: "We charge stations in the same area the same amount," Lebovitz said. "I don't know [Ron Keaton's] situation, and I don't want to speculate why he charges what he does."

William Fleischli, executive vice president of the Illinois Petroleum Marketers Association, didn't want to speculate either. But he said that, in general, when a mini-mart charges prohibitively high prices at the pump, it's probably a sign that the owner isn't in a financial position to keep buying gasoline from suppliers, but wants to keep the convenience store operating.

Now that, at last, makes sense. Whether it's the real solution to the great gas-price mystery of the Northwest Side is, I hope, a story for another day.


MB--I’ve been scratching my head about a similar station, except this time, the expensive station is a Mobil (Lincoln & Seminary) without a mini-mart.  The cheap station?  A Shell (Diversey/Lincoln/Racine).   The Mobil station routinely charges around 70 cents more per gallon than the Shell.  It rarely, if ever, has any customers and cannot make up for a loss of gas sales with mini-mart sales.  Each day as I ride the No. 11 bus down Lincoln Ave. I wonder how/why it stays in business.

Interesting. Hmm. I'm hoping to hear from people who really know this business to explain what's going on. My failure to solve this mystery definitively was frustrating yesterday. Meanwhile, your reference to the No 11 bus reminds me to Mark Jacob's column in Sunday's Trib in which he related that "riding the No. 11 bus" is slang for walking, as the digits 1 and 1 look like legs.  I plan to incorporate that into my slang, should I ever walk anywhere. 




I wonder about that one every day when I get on or off the Blue Line. But I'm not so sure the theory about wanting to keep the convenience store open while not selling any gas makes much sense either. Can a C-Store really turn over enough sales to pay the rent, salaries, insurance, etc. when there's not much vehicle traffic due to the high gas prices? There'd have to be a lot of loyal drive-in and pedestrian customers to make that work. Maybe the owner owns the land so doesn't have rent issues.

ZORN REPLY -- Shell told me that Shell leases the land and in turn leases the station to Mr. Keaton.

There's a Shell in Evanston that routinely charges $.50-$1.00 more per gallon than other stations. It also has mechanics on duty.

Rumor has it that the owner really has no interest in selling gas, but needs to, in order to keep his garage open.

Whenever I pass it, I also want to question the people filling up there.

Shell has got to be lying.

My father was a Clark Oil Dealer and Clark Oil drove him out of business by selling him the gasoline from the tanker (he had to buy it per the lease agreement to own the station) for more than what the local stations in the area was selling there gas to the public. Clark made tons of money once they owned the station and they lowered prices.

This sounds like the same thing. It appears that Shell knows that once this station is under Shell control that they will have a money maker.

Gas prices in Champaign-Urbana are currently around $1.53. As we travelled on I-74 over the holidays we noticed the price gradually increasing. We seem to be getting the better deal, but it is curious why it varies so much within a 2-3 hour drive.

The real question is, what is the REAL price of gas, including wars and a global climate destruction for our grandkids. Part of the cost is also the fact that the money gets sent to Saudi Arabia, and funds there fundamentalist extremists. Gas has other hidden costs, but these are the top three. And they are the top three problems facing our generation right now.

So, I think the real question is not whether gas prices are uniform, but why they rise and fall, and what they mean. A new administration is arriving and promising change. Policies are about to be set, sand uddenly gas prices drop. Why?

A drop of 50% on gasoline is not the result of free market forces. Demand did not suddenly drop by half. That is manipulation. That is the pusher giving the recovering addict a cheap fix, to keep him hooked.

So, far from being disturbed that gas prices didn't all fall evenly, I am disturbed that they fell at all. High gas prices would force the needed change, and low prices will make it politically unpopular. But change is what we need. Let's take our medicine now, and get it over with.

I don't know if electric cars are the way, or public transit, or what. But I think raising gas prices permanently would clarify our direction almost immediately.

This is B.S. they charge higher prices because they can, there is no one to stop them so they just do as they please.

ZORN REPLY -- But they can't, that's the thing. Almost no one is buying gas there.

I must say that I am shocked to hear that both stores are, despite Mr. Keaton's statement, being run by the same family. I don't know about the Mobil station, but after being denied the use of the restroom at the Shell station several years ago, despite pumping nearly thirty dollars worth of gas and buying two packs of cigarettes, I have been hoping the Shell station would close all summer. Of course, if Mobil is owned by the same family...

THANK YOU for writing about this. I drove past there recently and couldn't believe how high it was.

I don't think I'll buy from either station.

Actually, I try to avoid buying gas in the city altogether because city/county taxes are way too high.

Eric, has anyone kept a list of all the "excuses" the station owners, refiners and distributors have given this year for the price of gas? They get more creative every time you ask and not one is a straight answer except for Mr. Fleischeli's answer for the prices @ the Shell station.

I passed by that station last week and wondered the exact same thing. Who in their right mind would go into that station. But let's get deeper with this. Many of us who are long termed Chicago residents can remember all the fights as each of those corners became another gas station.

The stupidity in Chicago allowing station after station to fill major corners is not a great business decision for any community.

Well, there are some people who believe that a higher price means the quality is better....

Not unlike the Shell @ 47th & Gilbert (Willow Springs) on the border of LaGrange/Western Springs. If people don't want to drive an extra 5 blocks to save 10-15 cents a gallon, they're going to keep gouging. The owner must assume the customers are stupid.

Thanks, i've wondering about this for weeks. Always was surprised when I saw cars in shell station daily.

ZORN REPLY -- I drive by there a lot and almost never see anyone buying gas.. There can be lines at the Mobil station across the way, but the lot at the Shell is empty.

I live around the corner from here and was wondering about this myself. Thanks for the article!

one of the priciest gas stations in the continental U.S.?

The gas station on Semoran Blvd, just north of the Orlando Intl Airport has that distinction. It's nearly $1 higher than anything here in Chicago. Talk about gouging visitors, this Florida station is getting rich and the Central Florida BBB doesn't seem to care (I've written twice).

I go there for work, I can't stand Florida.

What's the traffic pattern like? The Shell station may be on the side of the street that gets heavier traffic at the end of the day, which means cars would have to turn left or turn around to use the other stations. Cars are more likely to stop at the end of the day than in the morning when they're trying to beat the clock to work.

The traffic pattern may be artificially increasing demand at the Shell, allowing a higher price.

I live in Dupage County and a Mobil operator told me that Shell drove the dealer across the street from him out of business the same way. That was about four years ago.

Turn them in to Lisa Madigan for price gouging. And while you're at it, report the Mobil station at Damen Ave./Eastwood. They're charging about 2.59/gal.

There's also a BP Amoco on Division Street just east of Harlem in Oak Park that charges significantly higher than others nearby (i.e., North and Harlem, Chicag and Harlem, etc.) Occaisionally, you do see people pumping gas there, and you have to wonder what they are thinking.

Seems to me that he's asking to be put out of business. I know certain gas stations raise their prices because they can. These are also gas stations that are located along a busy stretch of road or are open 24 hours. But the ones I know of usually increase their prices by 10 cents. This owner is just trying to make a profit.

As an "old" Old Irving Park resident, I say tear down the gas station and put back the Buffalo Ice Cream Palor in its original location!!!

Clearly this is all Barack Obama's fault. The Keatons bought both stations from Tony Rezko in a shady transaction concluded over coffee at Bill Ayres's house. Reverand Jeremiah Wright blessed the deal. Why won't the liberal media report the true facts?

Per "Car Talk" guys on NPR there is no difference in gasoline quality by brands. Product - whether Shell, Mobile, Costco, Valero, etc. nearly all come from the same refineries. Car Talk is a funny talk show airing in Chicago area on WBEZ 91.5 FM Saturdays at 9:00 a.m. They take listener calls re car issues. Not sure if they are joshing, which is what they do most of the time but they have a website too where questions may be submitted. They claim no difference in brands but if you feel better paying more, well la di da for you.

I think the prices went up to fund the Republican party, and when they lost the presidency the price of gas immediately dropped.

I live in Logan Square, and just this weekend a friend from North Center was astounded by the price of gas at both the stations at Fullerton and Western as well as the ones at California and Western - they were all selling for $2.39.

I live in the area also and am amazed at the price difference. My husband makes fun of me as I calculate the price difference as we drive by. I also have wanted to ask the few customers at Shell "WHY are you here?". Good article. Keep us posted!

The Shell stations here in San Diego are always higher than everyone else. I'll never understand why anyone would pay the higher price when other nearby stations are MUCH lower!

There's a Mobil station on Algonquin just east of Meacham in Rolling Meadows. Same thing. Price way higher than other local stations. Always wondered about that too.

There are no traffic issues with this corner as the station is accessible from any direction. The same with the Mobil station.

Convenience stores get at least half their sales from customers getting gas (that's why they are called convenience stores) so it would be surprising that they are swimming in walk up business.

It makes sense that they are trying to drive traffic to the other station. It is suspicious that the same family manages both stores. If their rent is based on a percentage of sales it may be possible to sustain lower sales at one store to push traffic to the other.

By the way, in St. Louis I filled up last week at $1.32 a gallon. Are the roads in Chicago that much better?

I remember reading once that convenience-store items have a much bigger margin than gasoline for most station operators, to the point where it becomes the source of most of their profit. (This is a bit of a coincidence because in a few minutes, I'm going to head out to a local gas station to pick up a couple of hot dogs at a good bargain.)

But as Vinny noted in the first comment, you'd think the station would need competitive gas prices to drive customer traffic. It's perplexing, to me at least.

As you may recall, there used to be three gas stations at that intersection (one was replaced with a drug store 2-3 years ago). Back then, one station was 10-12 cents more than the cheapest, and Shell was another 10-20 cents more than that. So this is not a recent development; Shell has had the most expensive gas on that corner for many years (granted, the margin used to be smaller).

I have noticed that sometimes Shell prices vary widely from those of competitors. I think it has to do with Shell being heavily invested in Nigeria. While events in the Middle East affect prices for most companies, Nigeria has more influence on Shell prices. Truth is, we rarely hear about Nigeria, so we aren't aware of day-to-day developments in civil unrest there.

Just returned from Tuscaloosa Ala - Prices there were unbelievably low - 1.69 per gal!!!!!!!!!!!! -went to a casino nearby and won$$$$ - gas stations and casinos here in Chicago area are robbing us big time. Here on the south side every station has a different price . We just suck it up-

@ James

You bring up an excellent point and I wish someone would address this. It actually makes me uneasy to see prices like this. As you stated, why were they so high before and why so low now? I live in the western suburbs and I see gas prices as low as $1.53. I don't think I have seen prices like this since the 1980s.

It absolutely has to be manipulation. There hasn't been any natural disaster that would prevent the oil from being drilled.

John said, "There's a Shell in Evanston that routinely charges $.50-$1.00 more per gallon than other stations."

I'm sure he's referring to the station on the 1100 block of Chicago Avenue, across the street from Jewel. We've laughed about that station's pricing for years - and have laughed even harder at the fact that there's always someone at their pumps, buying gas at those absurdly high prices.

Here's my theory: you notice the vast numbers of stations that closed as the price of gas rose over the past year? In the NW burbs there were dozens that are now just empty lots. So my theory is that the oil companies want fewer stations. They can easily close their own stations but have to put the others out of business... presumibly by jacking their resource price sky high.

Then, there are a lot fewer stations and it's easier to rasie prices down the road - supply & demand.

I know the corner where that Shell station is. It's the exact same location as the old Buffalo Ice Cream Parlor, once a Chicago institution on the Northwest Side. When the owner (maybe 20 years ago) wanted out of the business, he sold the site to Shell Oil. But news the Buffalo (which sold real hand-made ice cream and served sundaes in old-fashioned wooden booths) would close got people outraged. Even Mike Royko campaigned to keep the Buffalo in its original state operating. With all the uproar generated, Shell backed off tearing down the Buffalo and replacing it with a gas station. But they must of put some pressure on the owner because, according to Royko, the owner suddenly dismissed all employees one evening and before morning the Buffalo had burned down. An angry Royko said he'd never buy gas at any station built on that location. So with the high prices that Shell is now charging, Rokyo must be smiling from up there!

Here's a thought. Company vesicles that have gas cards/accounts could be getting their gas there. Especially if the owner has ties to someone that fills up in the neighborhood.
This is a scam that some smaller communities have to deal with. Say... when the mayor owns the station, and all municipal vehicles are required to be filled at his station. I wonder if you kept vigil, who would you find filling up at that shell?

I'd love to see the sales and profit numbers for his gas pumps. Gas margins at the pump are ridiculously low. If he’s charging 50% more for gas, he only needs a few people a day not paying attention to the price to make his pump profits equal to those of his normally priced competitors. And to answer the poster who asked if a convenience store can support the entity as a whole: yes it can. I believe most stations would close their pumps altogether if it wouldn’t drive away their convenience store customers in the process. The convenience store needs the people, and the people need the gas. Nice symbiotic relationship.

There is a government website where you can report these gas stations that are price gouging, you need the address and the price they are charging.
Here is where you go. Please report this guy.

Gas Price Watch Reporting Form ... If you believe there may be price-gouging, or price-fixing, please contact your local authorities and fill out the form below.

Wow, gas in Florida is kinda of cheap at $1.66 a gallon. Maybe it's your government.

Here on the southest side, there haven't been gas stations in many years. Taxes on gas and cigarettes, and now the Illinois smoking ban have driven nearly everyone across the state line to make many purchases. One major truck stop in South Holland closed several years ago due to taxes driving truckers into Indiana.

There is a Shell in Downers Grove that does the same thing - overcharges on gas because the business is really all about the garage and the mechanics.

There also is a station (Marathon? Citgo?) on Cass and Chicago Aves in Wesmont that's always .80 - $1 more than the station directly across the street. I can't remember if they have a garage as well, but come on. Ridiculous.

The BP at Lawrence and Marine Drive is charging $2.48 a gallon. Are they really getting enough traffic off Lake Shore Drive to get away with that? I hope the locals in Uptown know to drive a mile to save 30¢ a gallon.

I never buy gas in Cook County if I can help it. I try to save it until I make trips to Lake County.

I always figured the station was getting its money from people who are desperately running out of gas, and get off the highway, think "oh gee gas is more expensive in Chicago", and grumble while they pay the difference. Of course I never noticed the Mobil was that much cheaper either.

This mysterious Shell station at Irving & Pulaski sits on the former site of The Buffalo ice cream parlor. I believe Mike Royko tried to save it, but it was wrecked in the 70's.

Eric, has anyone tried to estimate the amount of $$ lost by City of Chicago due to its high gas taxes? Or determined what the magic price point would be where most people would forego suburb savings and fill their tanks in the city?

As a 10 year reverse commuter, I almost NEVER filled up in the city (or no more than $5 worth to get me out to the burbs). I wonder how much revenue (sales tax, fuel tax, etc) Chicago loses per year.

On Cicero Ave just south of the Stevenson there's two or three stations that are always way high. They have been for a long time - like years. Seems to blow away the being almost broke idea as well as the company trying to break the dealer since these stations are differing brands.

Shell and almost any other big oil retailer have divested out of owning gas stations and went to franchised and independently owned gas stations. Looked like the lease agreement may be almost be up or only cover the store. I'm sure his fuel agreement has sky rocketed since its not coming from shell directly but a distributor. The guy has mostly likely not been able to make cost and continues to keep prices a little higher to make up his margin loss. If he doesn't meet his commitment Keaton might have grounds to break his agreement and rebrand to a more affordable distributor and brand. Happens all the time but I agree it is not fair to the consumers.

Thanks for writing this. I stopped one time at that Shell to fill up real quickly and only after I had finished pumping I noticed it was a hell of a lot cheaper at the Mobil. Great insight on this.

My co-worker went to Kansas for the holiday. She paid as little as $1.39 in western Iowa.


Thanks for the column. My wife and I have been wondering about this for months and, like others, had many wild ideas.

Thanks so much for helping solve this mystery (or at least add more light to it).

Here'a another gas curiosity.

I live on the South Side near 79th & the Dan Ryan (I-94). I work in Deerfield off of Lake Cook Road. When i stared working there earlier this year, the gas was $0.10-$0.15 cheaper than near my home.

No big deal...Lake County probably has lower sales & property taxes.

But since Hurricane Ike hit, the South Side in my area along 79th & State Street, gas has actually been $0.10 cheaper than Deerfield or anywhere else in-between!


If Mr. Keaton wants to charge more for gas than his competitors, then so be it, that's his right as a business owner. If he wants to charge $4 a gallon, what business is it of mine or anyone else's to inquire why? He could raise the price simply because he felt like it, or maybe he had a dream that told him "if you raise it, they will come". Regardless what the reason is, he's free to charge whatever he wants, no one is forced to buy their gas there, and if it's not profitable, he'll soon go out of business.

Since I live in the neighborhood, I also have wondered how the gas station could survive by charging such high prices. It has typically charged more than the Mobil station across the way, but the difference was usually not more than 40 cents when the price of gas was higher. It's interesting to note that the same family owns both stations.

However, if he isn't in a financial situation to purchase more gas, does that mean the gas is old, and really should not be bought? And while he may not have the money, he certainly won't if he keeps those prices high. And can't the family lend some money to Ron? They're busy all the time. But then, if Shell is trying to run him out of business, he couldn't afford the higher prices indefinitely. If Shell does charge the same price for local stations, and those other stations have the same overhead expenses, why do those stations charge less?

And I also don't see how the convenience mart matters. The Mobil station has the fast food franchises and other items, in a much more pleasing atmosphere. Something else is going on here!

The traffic pattern is irrelevant. The Shell station is on the NW corner of Irving/Pulaski, while the Mobil station is on the NE corner. The intersection is heavily traveled in any direction, either day or night, and also is only one block from an exit on the OB Kennedy, as well as to the IB Kennedy.

Gas prices fell by 50% mainly because of the dollar getting stronger, not manipulation. All summer as the dollar got weaker, traders would use crude to hedge their exposure to the dollar, lifting the price of oil. Once the global market tanked in Sept/Oct, the dollar began to surge and oil prices unwound. For example the exchange rate for GBP was 1.99, now it's more like 1.49.

Just proves they never should have torn down The Buffalo Ice Cram parlor.

The BP at Lawrence and the Kennedy is selling gas for more than $2.83. I live right by there and sometime have to use it to fill up.

What a rippoff.

I find Mobil's to be particularly expensive, but know their corporate office has (high/low) price controls on dealers. They can't arbitrarily charge $5.00 or $0.50.

As for Shell, I don't know, but presume they have a similar policy.

But I know this - I hope the oil drillers and suppliers are choking on their own oil. It almost makes the recession worthwhile. As one pundit said last week, "The Gulf of Mexico is full of oil tankers with no place to go".

$14,600,000,000.00 for Exxon/Mobil in the 3Q? Choke on it!

Gas in Southern California is about $1.85. That Shell station is way overpriced.
I've heard gas stations make most of their money on the Convenience store, so maybe this is the case. I agree with James. I think gas prices are being manipulated. Oil companies want green technology, CNG vehicles to die. I think we're getting played like a bunch of chumps.

Great article, and while you weren't able to crack the nut in full, I appreciate you shedding some light on the situation including the ownership link with the Mobil, and glad to know I'm not the only one puzzled/irked by this particular station.

I've watched them go from $3.99 a little over a month ago (when prices were about $3.29 at the Mobil) to $3.69, to $3.39, then the big jump down to $2.79. I drive by there 2-3 times a week and it's almost becoming a game to see the price difference with the Mobil.

I saw two cars in there only one time, and wanted to go shake the driver to see what they were thinking. There's not being price sensitive...and then there's being downright foolhardy. The best I could surmise was they are brand loyal to shell and it's the only shell in the immediate area.

But if the point on the owners being more focused on the convenience mart and don't want to be buying gas from distributors is true, these Shell loyalists should consider how old the gas is that they're buying.

I think the whole place should be boycotted, Food Mart and all, until they come into a reasonable range for the market. If they don't want to sell gas, Keaton should sell the station to someone who does.

The station must be owned by a member of Daley's inner circle or else someone in the Cook county democratic party. Probably all the city ee's are required to get their gas there so the coffers stay full. Obviously, there has to be some reason for the high prices because if they weren't selling gas for this price they would bring it down quickly. Anybody who pays it are stupid or has a an ulterior motive or no common sense.

ZORN REPLY -- Or isn't paying attention. There really aren't that many cars there. If I had an assistant with a cute nickname, I'd send him over there to watch and wait and count. But alas.

I use to manage a station some years ago and the profit on a gallon of gas is nothing to a station. you make more off the soda and candy then you do the gas. I wouldn't buy gas there either because they aren't getting typical fills. They could also be getting too much water at the bottom of the tanks if no one is watching for that. (Happens at all stations) It isn't the responsibility of the tanker trucks to fix the water issue either. Typical profit in my day per gallon was less then a penny.

We are taken for a ride in more way then one by our gas station, by our walmarts, by our dunkin doughnuts, etc.

Last time I checked US consumers spend billions which end up in China, Saudi Arabia, India, etc, etc... who can guarantee that one of these day all that power and money won't be used to destroy us?

To James and Ann:

Price-manipulation it is, but not by gas stations or oil companies (at least not directly). This web page should shed some light on the issue, which ought to be re-regulated:


Thanks for writing about this .... I've been puzzled myself!

This hasn't just been an issue for this summer. I've lived in the neighborhood for more than six years, and as far as I can remember, the Shell station has always been more expensive than the Mobil station (or its predecessor, the Marathon station). There used to be a third station at that intersection, on the southwest corner, and the Shell station was more expensive than that one as well.

The change this summer is the size of the difference: it used to be 10-20 cents; now, as EZ says, it's 70-100 cents per gallon. I agree, this can't be price-gouging, because no one ever goes there. If anything, maybe the reason the Mobil station charges higher than average prices is because compared to the Shell station it looks cheap.

Great post, EZ. Keep on 'em.

Conservativeinthecity @2:33:48:

Of course the owner has the right to charge whatever he wants in a competitive market. I suppose it isn't our "business" to ask why, but that's what reporters do. The guy's in public commerce, in a heavily regulated commodity market, doing something that appears to be completely insane. It's as newsworthy as if he were standing on a streetcorner preaching the gospel of the Flying Spaghetti Monster -- more, since significant price disparities in competitive local commodities markets are more unusual than street crazies. The owner is free to tell EZ to mind his own business, but that hasn't happened yet.

Is it possible that they move most of the Shell gas over to the Mobil station since the scheme is to make one looks a lot cheaper than the other? Plus, if both are operated/managed by one Keaton, maybe the other Keaton does not know what is going on?

Maybe it's just *really* good gas.

The Mobil at Damen & Leland (4700 north) is sometimes 70 more than the Shell at Western and Foster. The Mobil seldom has customers for gas. But you're right. It has a mini mart that probably serves as an oasis and it is on 2 bus routes and it has a rapid transit station right there. That's how they're making money. Now it makes sense.

I know someone who owns a few gas stations up in Lake County. He told me that he makes about 2 cents per gallon on the gas he sells. Maybe this guy loses money trying to keep up with the guy across the street. I wonder if this guy doesn't care for the gas company antics anymore. Maybe he just makes his money off the store and mechanics.

With the gas prices fluctuating so much these days maybe he is tired of getting screwed on the margins. He buys the gas at the gas company prices, there is no negotiating. If the gas goes down 20 cents that day he's out that money. Maybe he figures its easier to protect himself and not sell that much gas. Esp when he makes a couple cents on a gallon on a good day. Plus 15 cents goes to the city anyways.

Another thing, when the gas company truck pulls up to deliver the gas you have no choice, you HAVE to take the gas, it's in the contract. On top of that, you have to pay for it right there and then. C.O.D.!!! The stations are independently owned and operated but the gas company really runs the show!! I would love to know the real story!!!

The reason for the various gas prices throughout the state is that sales tax is included in the price per gallon.

So, in Chicago, that is 10.25% compared to 6.25% in DeKalb, and 7.75% in Urbana.

As such, when you travel various interstates downtown state up to Chicago, you will see the gas prices which is in part a result of the higer sales tax rates! Thanks Todd, enjoy your new SUV!

Isn't there a rebate when you use a Shell credit card? I always thought this was why Shell gas was more expensive than other brands.

I recently completed a small study for a GIS software class at UIC where I tested my perception that gas is more expensive near highway on/off ramps. I collected data online from google/ gasbuddy and also called stations that weren't listed on those sites. Sample size was 143 stations, and prices were current for the weekend of 11/22-23. (The gas stations on the corner in question were not in my sample, sorry.) I found that gas stations on the North Side (defined for my study as North of Congress Pky) within 0.5 miles of highway acces had an average price a mere 2% greater than the average of stations beyond this buffer. But, surprisingly, on the South Side gas averaged 6% LESS at stations near highways. (Average gas price on the North Side, at $2.31, is also 0.20 more than on the South Side.) So my intuition overall was ...less true than it seemed.
But the amusing thing to me- was calling these stations and being told several times that they "cannot give that information out." It's on a billboard in 12" letters, yet it's a secret !

It's sad to see so so many people commenting who are completely ignorant of economics. Prices rose, and prices fell, because of the free market. In case it wasn't noticed, government did nothing last summer to bring prices down. Thank god. Prices fell because higher prices made suppliers open the spigot, i.e., more oil.
The suggestion that the high price at the Shell station is "gouging" is ridiculous. Nobody is being gouged. Nobody is forced to buy that gas. Indeed, nobody IS buying gas there. And that's the mystery: why is the station operator selling at a price that drives away customers?

just how do they figure the price of a gallon of crude?
we get "cheap" oil from alaska,
we should get a deal from canada and mexico,
all we have to worry about the minor amount from the middle east and so forth.
speaking of station prices - dont know why, but when the price was $4, Illinois and Indiana was very close - now I can go to Indiana and save .25 cents a gallon.

I've wondered about this as well, especially the Mobil station on Lincoln that other posters have mentioned. I walked past it this weekend, and they had regular for $2.79, while the Shell had it for $1.99. The gas station at Ashland and Fullerton is always about 30 cents more expensive than any other gas station in the area (except the Mobil now), and their regular was $2.41 over the weekend, something is really wacky with the Mobil. I'm interested to hear if anyone knows what's going on there. Its been a few years, but that Mobil used to always have the cheapest gas in the area.

It is impossible for me to see how the gas prices are higher than neighboring states-I live in Chicago part of the year and see the gouging taking place--today I paid $1.58 a gallon in Grand Rapids ,Michigan--(not known for discounts) this was at a Meijer Station--it will be lower this week-we pay high gas taxes, so what is Chicago's excuse?

Beware of BIG OIL. Now that there is serious talk about alternative energy, it's possible that low prices on petroleum products will used as a weapon to discourage work on such energy programs.

I moved out to Juneau, Alaska earlier this year from the midwest and it redefines HIGH gas prices. The average gas price here is $2.89/gallon today. This is a capital city with about 40K people in the most oil rich state in the union. Go figure that one!

OPEC is acting criminally to fix prices whilst millions starve in third world countries, unable to afford fertiliser, power tractors or get food or medical aid in.
If OPEC was a drug company, all the directors would be in jail.
The world needs to take a long hard look at what it actually costs to produce a barrel of oil, allow a reasonable mark-up and then enforce the price.
The lifestyle of many oil sheiks is obscene - private jumbo jets, ski slopes in the desert, ugly tasteless buildings and buying up half of London.
Arrest these criminals and sanction their countries - their actions are criminal.

No point in contacting the AG. She won't do anything despite being asked to time and again.
She doesn't think that there is collusion when all the gas stations raise their prices the exact same amount within minutes of each other and when they all sell gas for the same amount, despite what they paid for it in the ground. And Mr. Fleischle has stated the same old tired excuses for the cost of gas going up in Illinois, that he is now repeating himself. How many refinery fires can we have in Illinois anyway? If that is the problem it appears to be, the refineries need to do some serious training of their staff on fire safety. Downstate, if the wind blows a quarter of a mile faster in an hour, the price of gas goes up 10 cents. And they want us to believe it's because of factors other then greed?

How can the refineries produce gasoline and then sell it to different areas for different prices. Their wholesale cost does not rise as the distance to the refinery increases, so it is not shipping costs. This has been going on for decades. The wealthier suburbs gas prices tend to be higher than the poor suburbs even though the profit to the dealer remains the same.
I can't believe this is legal, though I do believe that no one will ever do anything about it.

Sales tax DOES NOT account for the wide difference in price. The difference between 11% and 5% tax is only 9 cents if gas is selling for $1.50 before tax. The differences in gas prices are much larger than that.

I've watched this topic...gasoline price fluctuations..for a while, and have all the same questions here in Louisiana.

My wife and I traveled to South Carolina for the Thanksgiving holidays and saw prices ranging from 1.49 (Augusta, Ga) to 2.04 (right here at home). Most were in the 1.59 to 1.69 range.

As with most of your readers, I question why gasoline got over $4/gal to begin with, if they can drop the price to 1/3 that price in just a few weeks.

Someone has been making redicuous profits at our expense, and holding their gas at the pumps at ransom in the process for years.

Has the bottom finally dropped out, and gasoline prices finally come crashing down to where they should have been all along? I suspect this might be close to the truth,

I have made a pact with myself. I drive about 20 mi/day one way to work, I pass several stations along the way that drastically vary in pump prices.

My promise is that I will drive the extra miles necessary to buy the cheaper gasoline (not necessarily the cheapest I see). I'm not doing this just to save mone, but that is a driving issue. I am boycotting the higher priced stations. I'm encouraging my friends and family to do the same. I won't buy so much as a bag of peanuts from one of the higher priced locations (one of them has a Subway franchise that sells those great macadamian ccokies!). How long could they stay in business, even with the convenient store arrangement if no one stops at all.

One concern I have though, is that the station owners are forced to sell their gasoline at the price they paid last week, which could be 20 cents higher than the folks across the street paid this morning, I can only hope that the prices will eventually even out for them in the long run.

The folks I fight against, for example, is a new station that opened for business about three weeks ago near a major highway here. One of those large casino/food stop stations with a breakfast/lunch deli. At 6am on opening day, their marquee said $2.09/gal. That night the prices was $2.29. and stayed that way until just a few days ago. Today, the price is $1.99. This morning, I paid $1.64 about 5 miles further down the road.

A 20 cent rise in a single afternoon? No, I doubt it. This man realized that other stations were at or just higher than his price, and he is at a very good highway intersection. No other stations for a while along that crossing highway in either direction.

I don't mind paying for convience, but not 36 cents, as was the case this morning.

Joe Zorn
Schriever, Louisiana

Shell isn't driving anyone out of business. If anyone that is not aware already. Ron & Roger have owned several Shell stations in northern Illinois for years. They probably still do. They have not just started charging more. They always have. I don't think this will change anytime soon. If it does, it will just be short term. People buying gas by Keaton unfortunately have Shell Gas cards, and are too lazy to find a different Shell.

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