Why the Differences in Gas Prices?

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Knoxville (WVLT) - The average price for gas in Knoxville Wednesday is $2.16, but some are around two dollars.

There are two stations in North Knoxville that are boasting prices at a $1.99, woodland mart and deli on Woodland Avenue and gas mart on Clinton Highway, prices we haven't seen in a while.

A $1.99 is posted at Woodland Mart, in North Knoxville, and cars sit about four or five deep waiting to fill up.

"It's been hectic, we've had people lined up, clean down to the road, people are trying to beat people to the pumps," says manager Robin Smith.

"20 cents a gallon difference is 3 dollar a day, times 6, 18 bucks a week, so that's another fill up so I can save money on it," says Richard Nelson, Maryville motorist.

But drive a few miles down the road and prices are not so low.

The average price in West Knoxville is about $2.19, experts say the smaller stations, like woodland mart, have more flexibility with their prices.

"My guess is what they're trying to do is break that $2.00 barrier because by breaking the $2.00 barrier that rings like dollar signs in the eyes of the consumers of gasoline," says UT Economics Professor Matthew Murray.

Customers say it's actually 'making' them money.

"I don't have to put out as much in the tank, I can put more in my bank account and it's a little better that way," Nelson says.

But while customers may be saving money, experts say the stations may not be.

"They may very well be losing money, or not making very much money on those gas sales at $1.99 a gallon. In realizing lower profits today, if not losses today in order to get greater market share in the future," explains Murray.

Prices may be low now, but forecasters are predicting they will climb through the winter and into the peak driving season in the spring.

"At least today the expectation that gas prices will rise once again, but the forecasters 2 months ago were wrong and let's hope those forecasters are wrong as well about the situation in the spring," says Murray.

Even though prices may rise again, for the time being owners here hope they can keep their prices low.