[sammyg2]

A half-mile from my house, there is a shell station and an Arco station across from each other.

The Arco station is typically priced the cheapest in the area while the shell station's fuels are pretty expensive.
a 40 cent difference in price grade for grade is not unusual.

Both stations are owned by the same company.
Both stations get their gas from the same distributor.
The gas is made in the same refinery, in the same process, and the only difference is an ounce of additive (solvent) here and there.

It is all about marketing strategy. Some folks believe that gas is gas and that buying the cheapest (top tier) gas they can find is smart. And they are right. So the Arco brand caters to that market.
Arco sells gas very cheap, only making a few pennies per gallon. But they move a very high volume, which translates into enough profit to run the
station and sell ho-hos and zagnut bars and doritos.

The shell station caters to a different market segment, the one that says "you get what you pay for" which is pound foolish. People who are very susceptible to THE POWER OF SUGGESTION and advertising. ^^^^^^ see above.

That station only sells a fraction of the fuel that the Arco station sells, but with the very high profit margin it still covers the overhead and makes an equivalent profit.

There are no Shell oil refineries in So cal. There are no Exxon or Mobil refineries in So Cal (any more).
So guess where their stations get their fuels from? Typically from the same place. One refinery that makes 25% of all the fuels (including jet) in So Cal.
That refinery also supplies fuels to USA stations and Thrifty stations.