Gas Prices Holiday Travelers Are Likely to Find Best Price at Home
Harry Levins Of The Post-Dispatch Robert Kelly Of The Post-Dispatch Contributed Information To This Story., St Louis Post-Dispatch (MO)
Given the price of gasoline, holiday travelers might find there's no place like home.
A survey by the Auto Club of Missouri puts the average price in the St. Louis area at $1.14 a gallon for self-service unleaded regular, as of Monday.
(In the Metro East area, an informal survey in Swansea found Tuesday's prices in the range of $1.199 to $1.219).
In the Kansas City area, the average price is the same as the average price here - $1.14 a gallon. But on the other three points of the compass, outward-bound holiday motorists will find higher prices:
To the north, toward Chicago, prices in Illinois average $1.40.
To the south, toward Memphis, prices average $1.243 in Tennessee.
To the east, toward Indianapolis, prices average $1.212 in Indiana.
Nationally, the average price is $1.30 - up 7 cents over last year's holiday price.
Why do gasoline prices go up (and down) so suddenly?
Because gasoline is refined from oil, and oil is a commodity - a bulk good, like metals, grain and livestock.
People who deal in commodities live closer to the law of supply and demand than most businesses.
The law of supply and demand holds that the price of anything sits where two curving lines cross on a graph:
A demand curve, which falls from left to right. It shows how many consumers are willing to buy at any given price.
A supply curve, which rises from left to right. It shows how many producers are willing to sell at any given price.
When supplies are down or demand is up, the curves shift, and prices rise. When supplies are up or demand is down, the curves shift the other way, and prices drop.
In theory, this law of supply and demand applies as sternly to General Motors as it does to your corner Conoco dealer. But in practice, auto prices never seem to fall, while gasoline prices bob up and down.
That's because commodity prices are much more sensitive to supply and demand, as any farmer can tell you.
Take citrus farmers. …