Gas of price has relatively little to do with the business actually operating the gas station [1]. You'll see that on average, you have something like 20 cents going to "Distribution Costs, Marketing Costs, and Profits" at 4 dollars a gallon. You're not going to be able to squeeze much out of that.

Unfortunately, I can't get a source to it, but from what I remember, the margins on gas are already so thin that most profit at gas stations come from the random other stuff they sell. I mean think about it... 20 cents (maybe) for a gallon of gas, or like 80 cents (or more) for a can of pop.

Also, a side effect of the razor thin margins, as well as the relatively fixed consumption pattern means that while price at the pump tracks crude prices going up almost instantly, on the way down, every single gas station wants to be able to enjoy their extra margins for as long as possible, so they reduce their prices slower. And this clustering phenomenon just encourages that even more, since the moment you undercut your competitor, they'll know in like 5 minutes or something and match you, and now both of you just missed out a bunch of extra cash.

Edit: silly me, linky here: [1] http://energyalmanac.ca.gov/gasoline/margins/index.php

I've also heard this from a guy who works as a tech at a gas station. They make way more off of lottery tickets, alcohol, and other various things than actual gas. And he also went on about car washes, how freaking well they do and how little maintenance is required for the things to make a lot of money.

My family owns multiple 7-Eleven stores and gas sales are a very big part of the store's income. A good store sells over 5,000 gallons a day.

I've heard of 'price wars' between gas stations across from each other.

I remember seeing one attendant using binoculars to check out the prices of the station down the road from them.

I also remember a radio station's competition where the petrol station that sold fuel at the lowest price won the competition. In the final hours of the competition, there were two or three stations selling petrol at 1c/litre... and they lost to the station that was paying customers 1c/litre...

What was the prize?

It was about 10 years ago, I can't really remember. Something like $10-20k? Maybe 50? It wasn't outrageous, but it was enough to get a lot of petrol stations competing for it.

like who has the highest price wins?