You asked for it: ‘Owed to Billy Joe’

Recently I’ve gotten a number of requests from readers for a reprint of a slightly tongue-in-cheek column I wrote some years ago, on the subject of gasoline prices.

I might attribute this to the ageless quality of my own writing, but I rather think it may have more to do with the recent climb in gas prices. Either way, as Peter Allen said, “Everything old is new again.” So here it is! “Owed to Billy Joe.”

I recently spotted a clerk at a convenience mart changing gas-price signs, and stopped to ask her how the store determined when and by how much to raise or lower its prices.

“It’s simple,” she said. “We just take our cue from the Exxon station across the street. If they raise or lower prices, so do we. All our stores’ gas prices are keyed to the prices of other nearby gas stations.”

Intrigued by her answer, I sent this column’s top investigative reporter — me — to find out more about this unlikely pricing structure.

I crossed the street to the Exxon station, and asked how they determine the price of their gasoline. I learned that they too were keyed to another station, this time a Texaco right down the road.

This domino-like structure turned out to be prevalent throughout the area, with each station raising or lowering its prices when its cue station did. Determined to find out where the chain ended, and feeling like an automotive Woodward and Bernstein, I pushed on.

My quest took me all over town and eventually out of the state, where I discovered many such pricing chains spiraling out across the whole nation like the spokes of a wheel. A few months and a few thousand gas stations later, the answer began to emerge as I followed the spokes back in the direction from which I had come.

I finally found the hub of the price-structuring wheel in a most unlikely place — a dusty back street in Gila Bend, Ariz. There it was, in all its dilapidated glory: Billy Joe’s Gas-n-Go Market!

I couldn’t believe it. What I had discovered was enough to put the lid on all those international-oil conspiracy theories, once and for all. Here, at this old, wooden grocery store/gas station, the nation received its cues on when to raise or lower gasoline prices.

I watched as cars from every oil company cruised the street, eyes locked on Billy Joe’s gas-price sign. According to rumors I picked up, Dan Lundberg, whose The Lundberg Letter is considered the bible of gasoline-price predictions, used to have an apartment across the street. A cafe nearby was filled with white-robed, bearded Middle Easterners, oil sheiks in a different desert. I jumped out of the way as a Department of Energy car whizzed by, its driver jotting notes on a pad.

It was too much! I was at the hub of the pricing wheel, Billy Joe’s Gas-n-Go, the place where every oil company and producer got its cue to raise or lower its prices.

But how did Billy Joe himself set his prices? I had come this far, and I wasn’t about to quit before I’d found out. I hung around for days, watching and waiting for my opportunity.

Late one afternoon I spotted Billy Joe himself rocking away on the rickety front porch of his establishment. Billy Joe, a good ol’ boy by way of Florida, invited me to set a spell. I accepted, buying a six-pack at inflated prices to help us ward off the dust cloud generated by all the passing cars.

After we’d chatted awhile and the beer had begun to loosen him up, I asked Billy Joe what made him raise and lower his gasoline prices. Unaware that his place was the keystone to the entire international price structure for gasoline, he leaned forward in his rocker and, after spewing a stream of Red Man into the dusty parking lot, told me what I’d come so far to learn.

“‘Tain’t no secret to it,” he said laconically. “Y’see, I jest love poker. I play two, mebbe three times a week. If I lose a little, I raise my prices a little to make up for my losses. If I lose a lot, I raise my prices higher and hold ‘em there longer.

“If I win, which ain’t too often, I lower ‘em to celebrate.”

I couldn’t believe my ears. So much for OPEC and its much-heralded pricing meetings. Forget the “Giant Oil” greed-and-conspiracy theory. Throw away supply and demand. The answer was here in Gila Bend, at Billy Joe’s poker table.

So the next time you notice gas prices creeping upward, don’t look to the Department of Energy for an explanation. Don’t bury yourself in the financial section of the newspaper or call some professor of economics, looking for an answer.

Just hope that Billy Joe starts getting some good cards.