Price war forces gas prices below $2 on road south of Denver
The current gas price war on a stretch of road south of Denver is getting pretty intense.
As gas prices continue to plummet on a stretch of road south of Denver, drivers are finding themselves filling up their tanks for under $2 a gallon. Thanks to a price war spurred on by the arrival of a new gas station, prices have dipped to record lows.
The scene on Arapahoe Road is becoming increasingly competitive as multiple gas stations battle for the attention of passing drivers. A recent photo shared on X (formerly Twitter) shows a gallon of regular unleaded at a station on the road going for a jaw-dropping $1.74. And just a few blocks down the road, a rival station is offering gas for even cheaper at $1.72.
These prices are a striking $1.61 below the Colorado average of $3.33 per gallon. While this may be a pleasant surprise for drivers looking to pinch their pennies at the pump, the question remains: how did this price war start in the first place?
Experts at AAA Colorado say it all began when a new Quik Trip station opened its doors at the corner of Arapahoe Road and Syracuse Street.
As the Quik Trip aggressively lowered its prices, the three other gas stations on the same mile stretch quickly followed suit in order to stay competitive. Skyler McKinley, spokesperson for AAA Colorado, explains that this type of price war is not uncommon, particularly when new players enter the market.
"These new operators can come in and sell fuel fundamentally at a loss because they weren't making that much money off it to begin with in order to change consumer behavior and make folks aware that that station exists," McKinley said.
But don't expect these incredibly low prices to last forever. McKinley cautions that gas price wars are typically short-lived, as they are not sustainable for gas stations in the long run. Instead, the aim is to draw customers inside the convenience store attached to the station, where the real money is made.
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According to industry estimates, about 44% of people who stop to buy gas will make a trip inside the gas station’s store. And of those, about a third of them will make a purchase. This ultimately drives up profits for the gas station, even if they are selling gas at a loss.
So while these sub-$2 gas prices may seem too good to be true, drivers in the Denver Metro Area are taking full advantage of the price war and enjoying some much-needed relief at the pump.