Zone pricing is a gasoline industry practice of selling the same brands and grades of fuel to retail sellers at different prices depending on the “price zone” in which the retail seller is located. Price zones are not established by law. Instead, gasoline suppliers determine their own price zones. They may establish as many or as few as they determine best suits their needs.
In a 1997 General Law public hearing, a major Gasoline spokes person described the practice of creating price zones. At the time he said that his company has 46 different price zones in Connecticut - alone.
He further stated, “We carefully analyze the competitive conditions in order to determine the boundaries of a given market so that purchases supplied by my company in different zones do not compete significantly with each other. The analysis often takes into consideration such factors as competition, gasoline taxes, type of product, traffic patterns, distance, natural barriers such as rivers and parks, and man-made barriers such as highways. “
His description of the process did not identify the specific information used or the criteria applied. His company, like the other gasoline suppliers, has not identified its price zones.
In addition to not disclosing where the boundaries are, gasoline suppliers do not disclose the price differentials between zones. In 1997 said that the differential ranged between 2¢ and 5¢. That year, the retail price of gasoline in Connecticut ranged between $1.25 and $1.40 per gallon.
Can you imagine what it is now?
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