GasBuddy says gas prices rising due to ‘price cycling’
The website GasBuddy.com says gas prices could see an upswing soon due to a term known as “price cycling.”
“Retailers out there trying to win our business,” said Shelton Weeks with the Department of Finance & Economics at Florida Gulf Coast University.
It’s basically a neighborhood price war driven by nothing but competition. One Company drops their gas prices 20 to 30 cents, then others follow to see who can offer the lowest price.
“If someone else saw us lower the price, they’d lower their price,” neighbor Richard Armoey said. “Competitive business.”
Armoey used to own a gas station.
Eventually though, one company throws in the towel, and all prices snap back up.
And experts said this price roller coaster happens when our northern neighbors are in town for season.
“They want to enjoy the warm weather,” Weeks said. “They want to get to the beaches and stuff. So if they’re paying an extra 10 or 20 cents a gallon, they’re going to go on in and make that purchase, and head to the beach.”
An average gallon of gas costs $2.43 in Naples and one cent cheaper in Cape Coral.