$5.99 Per Gallon is a Big Tipping Point for Bay Area Fuel

Thomas Smith

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Thomas Smith/Gado Images

If you bought gas in the bay area in the last few days, you may have noticed an interesting trend. Gas prices have been rising consistently for the last several weeks. Much of this has to do with ongoing supply issues as well as the war in Ukraine. Gas prices were trending towards six dollars or more per gallon. They had already reached this high level and some places in the bay area.

Lately, however, many Bay Area gas stations appear to be artificially holding their prices at just below six dollars. Many of the gas stations I’ve visited this weekend we’re keeping their credit card price at $5.99 per gallon for regular fuel. That level is probably important psychologically. Consumers may feel much worse about spending six dollars per gallon than they do about spending $5.99.

Of course, the prices are affectively six dollars per gallon anyway. But as retailers know, small changes like charging $5.99 instead of six dollars can make a big difference. It’s unclear what will happen with gas prices next. Some gas stations may be losing money by keeping their prices under six dollars per gallon. Some may be doing it because others are doing it, and they feel they need to keep their prices at this level to be competitive.

Gas prices have not risen quite as precipitously as many feared. Although they have exceeded six dollars a gallon in some places, prices have calmed down a bit overall. It’s unclear whether that will continue. The United States banned all energy imports from Russia, although those were a fairly small portion of America's oil in the first place. Still, volatility in oil markets may continue to push prices higher.

If that’s the case, it’s unlikely in the Bay Area gas stations will be able to keep holding the prices at $5.99 per gallon indefinitely. They’ll probably have to increase their prices eventually if the price of oil increases. For the time being, many are still holding the line and keeping prices at this level.

Visit the Bay Area Telegraph for more coverage of Bay Area gas prices.

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Award-winning entrepreneur, and the co-founder and CEO of Gado Images. Thomas writes, speaks and consults about artificial intelligence, privacy, food, photography, tech, and the San Francisco Bay Area. As a professional photographer, Thomas' photographic work regularly appears in publications worldwide. Pitches/news tips: tom@gadoimages.com

Lafayette, CA
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