[Labyrinthos]

My theory is that the economists at the oil companies are always trying to find the highest price that the consumer is willing to pay without significant reduction in demand. They tried $3.00+ per gallon and found that demand dropped and wiped out the added profit. The price slowly dropped to about $2.499 a gallon in suburban NYC, the impact upon demand (as compared to $1.999 a gallon) is negligible, and people have accepted that price as the new standard. Therefore, there is no reason whatsoever to drop the price below the standard that people are obviously willing to pay.

[Quilla]

I suspect your theory is very close to reality. However, after checking local prices at gasbuddy.com (from Diana's link), I noticed that one lone station in our area has dropped their price to $2.10 per gallon. I'm praying for a gas war. ;-)

[thackney]

My theory is that the economists at the oil companies are always trying to find the highest price that the consumer is willing to pay without significant reduction in demand.

Care to apply your theory to more than a couple of years? Try 1998-1999 for starters.