Surveys of Gas Prices Designed To Track Both Trends and Cents
By AL STEWART
Staff Reporter
What’s the real cost of an average gallon of gasoline in Los Angeles? It all depends on whom you ask.
Last week, the Automobile Club of Southern California pegged the average price of self-service regular in the Los Angeles/Long Beach area at $2.350, while the U.S. Department of Energy reported the L.A.-area price at $2.344. A whisker-thin difference to be sure, but at a time when weekly gasoline surveys are getting as much attention as movie box office grosses, those small deviations can add up.
There is no one price for gasoline, of course. What motorists pay depends on market forces that sometimes involve a single neighborhood or intersection. That explains why the price that gets published each week in the newspaper is often different than what the local dealer is charging.
“What our survey shows is that prices are volatile,” said Jeff Spring, a spokesman for the Automobile Club of Southern California. “That’s why we do a month-to-month overview and offer a rundown of (prices in) various cities.”
The Automobile Club, which releases its data each Thursday, gathers its information by tracking actual sales made using credit cards. It does not track individual gas stations.
“We’re talking about data from 75,000 to 100,000 gas stations,” said Fred Rozell, retail price director for the Oil Price Information Service, the Lakewood, N.J.-based company that supplies the automobile association with its price data. “We’re not relying on gas stations to report their figures. We have a relationship with Fleet Credit Card Services. We buy the information from them.”
While the auto club’s data come from a sample of stations and does not take into account transactions paid for by debit cards or cash, the government’s information is culled from a nationwide weekly phone survey conducted by 30 part-time workers at a total cost of $2,000 a week.
“It’s one of the greatest bargains in government spending,” said Jake Bournazian, an economist for the Energy Department’s Energy Information Administration, which issues gas price summaries each Monday.
The agency’s goal is to be accurate within one cent per gallon because federal agencies use the figures as a base for reimbursement of fuel expenses for civil and military contactors.
“Being off would cost millions,” Bournazian said. “It’s important that we can spot trends and that we know if the price is going to jump.”
Another frequently quoted source for gasoline prices, the Lundberg Survey Inc., is geared more toward paying customers. Although Publisher Trilby Lundberg frequently appears on television and radio news programs to offer her take on gasoline pricing trends, the bulk of the information gathered by the Camarillo-based company is sold to subscribers.
Lundberg officials did not return calls, but in its promotional literature, the company says its findings are based on surveys of some 8,000 gas stations nationwide.
Whatever the variations in methodology, those who rely on the data said the primary purpose of price watching is to identify trends.
“It used to be that even one cent off would influence consumers shopping for a bargain, but that is no longer the case,” said James MacDonald, an industry consultant and former oil company executive. “You look at all these prices they put out and they are usually awfully close; so what the heck difference does it make? What matters is whether the prices are going up or down.”
While each organization’s price-tracking tends to advance their findings as the definitive source, a precise measurement can be elusive.
“There are always going to be differences between the numbers you see reported for the nation or for any region,” said John Cogan, an energy information specialist at the EIA. “The challenge is to be the one that comes closest to the hypothetical truth. In reality, all the different numbers from the different sources really just help you spot trends.”
Compiling these prices is often more akin to opinion polling than calculating baseball batting averages.
“People may ask: Why can’t these sources be in agreement?” said Bournazian. “Everyone is using a different sampling universe, so the numbers could reflect a statistical bias. The gas stations surveyed may be in more urban areas or near highways where the prices tend to be a bit higher.”
How They Measure
Reporting services differ in their approaches.
Energy Information Administration
– Headquarters: Washington, D.C.
– Frequency of reports: Weekly
– Methodology: Uses statistical sampling gathered by
30-person phone bank in Burlington, Vt.
Automobile Club of Southern California
– Headquarters: Los Angeles
– Frequency of reports: Weekly
– Methodology: Employs outside company, the Oil Price Information Survey, which in turn has a data collecting agreement with credit card company Fleet Services, using information included on credit card statements.
Lundberg Survey
– Headquarters: Camarillo
– Frequency of reports: Bi-monthly
– Methodology: Company says it conducts phone polls of 8,000 gas stations across the country
