Responses to higher gasoline prices

A site called, where volunteer spotters post the latest prices from gas stations around the country, has grown so fast that there are now 350,000 postings a week, triple the figure from a year ago. A similar site,, plans to launch a service this month that will allow users to tap into its database from the road with a mobile phone.

Credit-card companies also are rushing out new offers. Citibank is offering its cardholders in the New York City area and Miami double American Airlines frequent-flier miles for gas purchases until Oct. 31. Other cards, such as the Citi Dividend Platinum Select MasterCard and the Discover Platinum Gas Card let you earn a 5% rebate on gas purchases — Citi’s card gives 5% back at drugstores and grocery stores as well. (That has led many people to use it as part of a two-card strategy along with the plastic that earns the most travel rewards.)

Here is the link.  But this economist is puzzled.  Surely these are signs of a less competitive gas market — in the sense of moving away from uniform prices set at or near marginal cost — than they are signs of high gas prices per se.  Do higher and more volatile gas prices mean greater dispersion of prices (the first paragraph)?  Does this create greater scope for price discrimination (the second paragraph)?  Apparently so.

Addendum: Eric Johnson points my attention to pre-paid gas cards, which limit your exposure to price risk.


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