Peak Pricing

I know there are folks who get seriously bent out of shape by this type thing (Gouging!), I think this is pretty cool, from Market Power:

I wouldn't have thought this would
happen, but it appears that a gas station I pass during my commute
practices time-of-day pricing, charging more during the peak period and
charging less during the off peak.

For the past two months, every time I have passed the station in the
evening, the price of gasoline has been at least three cents/litre
lower than it was in the morning on the way to work. This station is
very convenient for people to pull into on the way into London, but it
is very inconvenient for people who are leaving the city at the end of
the workday.

  • Does that work though? I've always thought of gas as a fairly inelastic product. Are people really willing to suffer the inconvenience just for a few cents a liter?