45-cent difference in gas prices within 5 miles in Birmingham? Here’s why (Hint: it’s not what you think)

Last night, I drove to Lovelady Thrift Store near Irondale to see what thrifted treasures I could find. While there, I noticed that two gas stations on either side of Crestwood Boulevard—a Murphy Express and a Shell—had a 15-cent price difference, despite being 100ish feet from each other.

Why? Keep reading to learn more about why gas prices can be so different in the Birmingham area.

Gas Prices in the Greater Birmingham Area

As the driver of a nearly 20 year-old gas guzzler, I am acutely (and sometimes painfully) aware of any changes in gas prices. My daily commute from Forest Park to downtown usually takes me by two or three gas stations. Lately I’m used to seeing gas prices fluctuate in the $3.05-to-$3.25 range. Yet, the gas stations by Lovelady—a mere 5.6 miles away—are as much as 45-cents cheaper per gallon than the ones near downtown!

There are a number of factors that can affect the prices of gas, even within the same city limits. According to the U.S. Energy Information Administration, the retail price of gasoline can be affected by several factors, including:

• The cost of crude oil
• Refining costs and profits
• Distribution and marketing costs and profits
• Taxes

According to Jim Wadsworth, founder and former owner of Wadsworth Oil, small-time gas station owners are not as flexible as larger corporations.

Jim: “Large conglomerations—such as Costco, Wal-Mart, Circle K—have a lot more buying power, so they can purchase their supply at a better price and respond to the market faster. It’s not that the little guy is trying to rip off their customers—in fact, we made a larger profit when prices were lower.”

But why do some gas prices differ so much within a small area? Here’s what Clay Ingram, Public Relations & Marketing Director at AAA Alabama, has noticed.

Clay: “Gas stations are free to price their gasoline at any price they choose, as long as we’re not in a declared state of emergency. If they feel like they can sell the same amount of gas at $3.19/gal as they would at $2.99/gal, they’re going to price it higher and make an extra 20 cents per gallon. They want to find the right balance and sell their gas at the highest possible price.”

According to AAA’s website, the average price of regular unleaded gas in Alabama (as of 1/6/2022) is $2.990, which is a good bit cheaper than the highest average price recorded in Alabama by AAA—$4.052 (on 9/16/2008). Here’s a breakdown on average gas prices in Alabama counties:

• $3.229 to $3.093 — Perry, Sumter, Chocktaw, Washington, Clarke, Monroe, Wilcox, Escambia, Butler, Lowndes, Pike, Bullock, Barbour and Geneva Counties.
• $3.092 to $3.032 — Jackson, Fayette, Randolph, Greene, Hale, Bibb, Chilton, Autauga, Dallas, Marengo, Montgomery, Macon, Conecuh and Coffee Counties.
• $3.031 to $2.994 — Marion, Lamar, Pickens, Walker, Blount, Jefferson, Cleburne, Elmore, Lee, Crenshaw, Dale, Henry, Mobile and Baldwin Counties.
• $2.993 to $2.940 — Lauderdale, Limestone, Madison, Colbert, Lawrence, Winston, Cullman, Tuscaloosa, Talladega, Coosa, Tallapoosa, Chambers, Russell and Houston Counties.
• $2.939 to $2.796 — Franklin, Morgan, Marshall, De Kalb, Cherokee, Etowah, Calhoun, Saint Clair, Shelby and Covington Counties.

Click here to view a map of average gas prices in Alabama.

Want to Save Money on Gas? Here are some tips

What can we as consumers do about gas prices?

Clay: “It really comes down to price shopping more than anything else. Nowadays, we’re buying gas based on convenience rather than price, which sends a message to gas station owners and oil companies that they can price it how they’d like. If we really want to see a difference, we need to make a conscious effort to buy the cheapest gas you can find every single time. The more people engage in that behavior, the more of an impact it’s going to have by creating competition in the marketplace.”

And if you want to get the most mileage out of every gallon, there are a few steps you can take to ensure your vehicle is running as efficiently as possible.

Clay: “Try to reduce unnecessary weight in your vehicle, whether it’s in your back seat or the back of your pickup. Another thing to keep in mind—especially now, with the colder weather—is to make sure your tires are properly inflated. Driving around on under-inflated tires hurts your gas mileage, wears out your tires faster and makes you more prone to have a flat or a blowout.

Another tip is to be a more conservative and safe driver. The aggressive driving habits some of us have—such as rapidly accelerating when the light turns green—can have a big impact on your vehicle’s fuel efficiency. Changing speeds constantly, braking and then speeding back up, changing lanes and more uses up a lot of gasoline.”

What do you do to save gas? Do you search for the cheapest prices, or buy based off convenience? Tag us @bhamnow to let us know!