Economics professor explains dip in Nashville gas prices

Gas prices can seem random, but there is a method behind the ups and downs. According to GasBuddy, Nashville gas prices haven’t been this low since late 2010. Lipscomb economics and finance professor Bill Ingram said prices have to do with simple supply and demand. “It’s all because of the price of crude oil,” Ingram said. “A big part of the cost of a product is the cost of the material that goes in the product. The United States is producing much more crude oil, so we’re less dependent on foreign oil.” In 2014, gas prices in Nashville spiked around April and began falling in July, which Ingram said is normal. “In the summertime when the demand increases, it puts more pressure on the manufacturers,” Ingram said. “They may have to use some equipment that’s less efficient. Some states require them to produce a different kind of gas in the summertime because there’s more of a chance of pollution. That costs more.” Customer demand and the price of crude oil, however, do not explain the variety of gas prices in one area. That is simply business. “One of the driving forces of pricing in product is competition,” Ingram said. “Certain parts of town, like a few blocks from campus in Green Hills, there are just a couple gas places. But if you go in another direction, like Thompson Lane, there are more places to buy gas. So it has to do with competition as well as the demographics of the neighborhood. Someone in Brentwood, where it’s more affluent, might be willing to pay more for convenience.” The cheapest places...