Explain Gas Pricing

So I got two things I want to talk about under this heading. They are kind of time sensitive, Arm and Leg Gasso I thought I would go ahead and put this up, despite having a couple of drafts still going that need to be finished.

First, this past weekend I was down in Tennessee for a bit. A week or two ago, the state of Kentucky was investigating why Louisville gas was on average .20 a gallon higher than the rest of the state. The answer was an easy one. They have a stricter formula due to air quality issues. Though since that it was pointed out that the Northern Kentucky area, just south of Cincinnati has the same restrictions and gas was cheaper there. Anyway, anyone living in Central Kentucky now knows that we caught up with Louisville. Average around here, at least when I filled up last week was between 4.09 and 4.19 a gallon, right at the mark Louisville gas was hitting when the complaint was going on.

Now here is my point though. As I drove south through Kentucky, on the interstate, where I typically expect gas to be just a little higher anyway the price did an amazing thing – it dropped. By the time I was just about in Tennessee the average price I was seeing was around 3.99 per gallon. Why is that? I just can’t figure, as it is a more rural area and I would expect there be a slight increase if it went anyway due to lack of selling as much volume.

It gets better though – as I crossed into the Tennessee the price dropped even further – eventually getting to about 3.81. I figure this drop had to do with tax structure in the state versus here in Kentucky, but it was just about the same right across the border and dropped the further I drove south. I figured if I had kept going, by the time I go the gulf coast I could have filled up for around 2.00 a gallon. Maybe there is something about the relationship to the coast and where refineries are that was aiding the price – then again Eastern Kentucky has a refinery and the prices are not any less there, even within the mile. Starts to remind me the airline math I talked about here before.

Now on to the second part of gas pricing – which will really get your airline math figuring process a humming along. A local talk radio show host was talking about the gas prices. A caller was noting that he stopped on 3.99, when it should have read a gallon and it was bit short of a gallon at that time on the second dial. Now, since then, I have filled up three times and watched and I am always hitting right on – but if they are not, I would complain to Ritchie Farmer, commissioner of agriculture – who is responsible for checking and certifying those to be accurate. That was not my what caught my attention though.

The next caller is the one. He called to say something about we had it wrong. The price was 3.99 per 9/10 of a gallon. That is why the prices are always followed by that little nine at the end, to signify it is that price at 9/10 a gallon. I bet that guy works the airlines and does those computations where it cost me less to fly from Lexington to Cincinnati and then on to Richmond, then if I had just went from Cincy to Richmond direct (by a factor of 2 or 3, I don’t recall now). Are there really people out there who think they are only paying that price for 9/10 of gallon instead of a full gallon priced at 3.99 and 9/10 of penny per? I hesitate to admit it, but apparently, yes, there are. I think I just recomputed the statement half the US is below average intelligence, given this new information, I didn’t realize just how low average was.

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