Do consumers impact gasoline prices?
Consumers have very little power as individuals but, if enough consumers give the same “market signal,” they can impact prices. First, when consumers buy gasoline at service stations in their areas with the lowest price, they take market share away from higher-priced stations; these stations may then eventually reduce their prices to be more competitive. The second way consumers impact the market is by reducing gasoline consumption. If enough people reduce driving or switch to more energy-efficient vehicles, gasoline demand would decline and prices would be dampened. 1 Statistics on U.S. gas stations from NPN MarketFacts 2008 2 Permanent Subcommittee on Investigations, Gas Prices: How Are They Really Set, Section III, page 45, May 2002. http://www.senate.gov/~gov_affairs/042902gasreport.
