Why Is This Man Charging $4.30 for a Gallon of Gas?

There is a Shell station in San Francisco, at Sixth and Harrison, that was recently charging $4.33 a gallon for regular gas and $4.43 for premium. Across the street is a Chevron station that charges about 70 cents less per gallon. Can you guess why? I seriously doubt it.

You might think it has something to do with Shell vs. Chevron policy or pricing, in which case you’d be a little bit right, but not really. You might think that the Shell station offers something that the Chevron station and others don’t, in which case you’d be wrong. You’d also be wrong if you guessed that the Shell station has huge insurance costs, e.g., or if you guessed pretty much anything else along those lines.

The reason the Shell station charges so much is because its owner, Bob Oyster, got into a feud with Shell over the price of gas and the rent of the gas station. So he decided to jack up the price of his gas to get back at the company. “I got fed up,” Oyster told the San Francisco Chronicle. “It makes a statement, and I guess when people see that price they also see the Shell sign right next to it.”

Oyster says that Shell and other big companies are squeezing service-station owners way too hard, and he plans to shut down his station soon anyway. “I’m going out with a bang,” he said. “And I don’t care if I don’t pump a gallon on the last day.”

My guess is that he won’t pump a single gallon on that last day — unless he suddenly changes tactics, puts up a big sign that says “Oyster Gas,” and drops his price to $2.

(Hat tip: Matthew Greber.)


mdw0526

This actually happened several weeks ago. After raising the price of a gallon over $4.00, as described above, he then lowered the price to around $2 to get rid of the remaining gas in the underground tanks.

People were lined up around the block for hours.

The station is now closed. The owner handed the keys back to Shell.

j.a.s.o.n

"People were lined up around the block for hours."

Ha! Apparently (in addition to not being familiar with the time value of money) these poor saps are not familiar with the money value of time (opportunity cost)! I can just imagine the excitement these people felt over saving $20 on gas in exchange for hours of their time while their kids sat at home wondering where daddy was.

makfan

There's another station in SF at 4th and Bryant that is a Shell and always seems to be considerably higher than other stations in town.

An Arco station at Market & Castro & 17th used to have wild pricing as well. Some days it would be as high as $6.00 per gallon, then it would drop sharply. Now the station is called "RC".

angelofthenorth

I have to admit to laughing when I see $4.30 cited as being a high cost for gas. Esp when we seem to be around the $8 mark in the UK...

skbarton13

This was noted as an example of media bias by James Taranto's Best of The Web on May 15, 2007:

Another great AP moment is this photo caption:

>High gas prices are posted at a Shell gas >station, right, with a Chevron gas station gas >prices posted at left, in San Francisco, >Thursday, May 10, 2007. With gasoline prices >poised to break records at the pump, energy >futures prices jumped Thursday as traders >noticed a gas supply imbalance in the fine >print of Wednesday's government inventory >report.

Gas at the Chevron station is $3.759 for intermediate grade and $3.879 for premium (regular is cropped out), but at the Shell station, shockingly, it's over $4 a gallon: $4.339 for regular up to $4.539 for premium.

What the AP doesn't note but the San Francisco Chronicle does is that the owner of the Shell station, Bob Oyster, raised his prices as a protest:

>Putting the price way up over $4 a gallon isn't >about making a profit. It's about making a >statement to a multinational corporation. After >Shell forced him to pay higher prices for gas >in San Francisco and jacked up his rent, Oyster >says, he decided to fight back.

>"I got fed up,'' Oyster admits. "It makes a >statement, and I guess when people see that >price they also see the Shell sign right next >to it.''

>In fact, far from making a huge profit, Oyster >is going out of business. He has operated the >Shell station at Sixth and Harrison for 22 >years, but he's walking away from it at the end >of the month, handing over the keys to Shell >officials and expecting them to shut it down.

Soon, no doubt, the AP will report that someone has done a poll finding that Americans think big oil companies are to blame for high gas prices.

See: http://www.opinionjournal.com/best/?id=110010078

Read more...

greebs

This is a very proud day - being cited, as a hat tip, by Stephen Dubner!

As noted above, the station closed a few days ago. I love this situation because it's such a classic San Francisco response to "the man." In any case, glad you found it as amusing and interesting as I did...I can now die in peace.

http://reignoferror.blogspot.com

Top_Gunn

Interesting. In the city where I live, a gas station went on for several years advertising prices about 50 cents more than anyone else (when regular was about $1), including the station across the street. I never saw anyone buying gas there. I figured it was a front for something illegal.

Kent

This man should be incarcerated for price gouging.

mdw0526

This actually happened several weeks ago. After raising the price of a gallon over $4.00, as described above, he then lowered the price to around $2 to get rid of the remaining gas in the underground tanks.

People were lined up around the block for hours.

The station is now closed. The owner handed the keys back to Shell.

j.a.s.o.n

"People were lined up around the block for hours."

Ha! Apparently (in addition to not being familiar with the time value of money) these poor saps are not familiar with the money value of time (opportunity cost)! I can just imagine the excitement these people felt over saving $20 on gas in exchange for hours of their time while their kids sat at home wondering where daddy was.

makfan

There's another station in SF at 4th and Bryant that is a Shell and always seems to be considerably higher than other stations in town.

An Arco station at Market & Castro & 17th used to have wild pricing as well. Some days it would be as high as $6.00 per gallon, then it would drop sharply. Now the station is called "RC".

angelofthenorth

I have to admit to laughing when I see $4.30 cited as being a high cost for gas. Esp when we seem to be around the $8 mark in the UK...

skbarton13

This was noted as an example of media bias by James Taranto's Best of The Web on May 15, 2007:

Another great AP moment is this photo caption:

>High gas prices are posted at a Shell gas >station, right, with a Chevron gas station gas >prices posted at left, in San Francisco, >Thursday, May 10, 2007. With gasoline prices >poised to break records at the pump, energy >futures prices jumped Thursday as traders >noticed a gas supply imbalance in the fine >print of Wednesday's government inventory >report.

Gas at the Chevron station is $3.759 for intermediate grade and $3.879 for premium (regular is cropped out), but at the Shell station, shockingly, it's over $4 a gallon: $4.339 for regular up to $4.539 for premium.

What the AP doesn't note but the San Francisco Chronicle does is that the owner of the Shell station, Bob Oyster, raised his prices as a protest:

>Putting the price way up over $4 a gallon isn't >about making a profit. It's about making a >statement to a multinational corporation. After >Shell forced him to pay higher prices for gas >in San Francisco and jacked up his rent, Oyster >says, he decided to fight back.

>"I got fed up,'' Oyster admits. "It makes a >statement, and I guess when people see that >price they also see the Shell sign right next >to it.''

>In fact, far from making a huge profit, Oyster >is going out of business. He has operated the >Shell station at Sixth and Harrison for 22 >years, but he's walking away from it at the end >of the month, handing over the keys to Shell >officials and expecting them to shut it down.

Soon, no doubt, the AP will report that someone has done a poll finding that Americans think big oil companies are to blame for high gas prices.

See: http://www.opinionjournal.com/best/?id=110010078

Read more...

greebs

This is a very proud day - being cited, as a hat tip, by Stephen Dubner!

As noted above, the station closed a few days ago. I love this situation because it's such a classic San Francisco response to "the man." In any case, glad you found it as amusing and interesting as I did...I can now die in peace.

http://reignoferror.blogspot.com

Top_Gunn

Interesting. In the city where I live, a gas station went on for several years advertising prices about 50 cents more than anyone else (when regular was about $1), including the station across the street. I never saw anyone buying gas there. I figured it was a front for something illegal.

Kent

This man should be incarcerated for price gouging.