Gas prices fueling debate

By Clay Wilson

According to a spokesman for a major gas station chain, the system of setting gasoline prices from store to store is too complicated to even try to explain.

The wide disparity of prices between stations in different cities – and even within the same town – seems to back up this assertion. A Friday telephone survey of four stations in four metro-Atlanta cities revealed prices for regular unleaded gas ranging from $1.55 per gallon to $1.60 per gallon.

Within a three-mile stretch along Ga. Highway 20 in McDonough, prices ranged from $1.55 to $1.59, with two stations of the same brand within two miles of each other at $1.57 and $1.59.

"This is subject matter we just don't talk about – It's just too complex," said Mike Thornbrugh of the Tulsa, Okla.-based QuikTrip Corporation.

"There is no other retail product that is so price sensitive or so fiercely price competitive that retailers post the current price on the street in large numbers at every store all the time," said a corporate statement faxed by Thornbrough. "For this reason, QuikTrip does not respond to external questions regarding the retail price of gasoline."

However, according to Carlton Paul of Blalock Oil Co. in Jonesboro, the chief determiner of gas prices on the retail level can be summed up in one word: competition.

"It mainly has to do with your competition in the area," said Paul, vice president of the 65-year-old company.

Although Blalock now mainly sells diesel fuel to grading contractors, Paul, who has been with the company since 1975, said it used to sell to gas stations.

"Gas prices change almost daily now," he said. According to the U.S. government's Energy Information Administration (EIA), the national average gas price of $1.64 per gallon is up one cent from the price a week ago.

Paul said that such rapid fluctuations can cause gasoline retailers to "get in a trap."

For instance, if a store buys a three-day supply of gasoline priceable at $1.55 per gallon, and two days later a competitor buys his stock at a cost that allows a $1.50 per gallon price, a retailer must decide, "Can (I) lose that in order to stay competitive?"

Another factor that can account for the difference in price between gas stations is whether the gas is "branded" or "unbranded," Paul said. Branded gas – such as BP, Exxon or Chevron, typically sells for higher prices than unbranded, such as that sold at QuikTrip.

Paul said some of the difference between branded and unbranded can be accounted for by a difference in additives. However, he said, "It's all gas – it depends on who you're buying it from."

Besides local factors such as competition, global forces also impact the price of gasoline. According to news reports, the Organization of Petroleum Exporting Countries (OPEC)'s decision to cut oil production by 1 million barrels per day beginning April 1 influenced the recent rise in gas prices.

A Reuters story published on Thursday, citing EIA information, said the gasoline market is expected to remain "tight" at least through summer – meaning prices likely will remain stable or increase.

That's not good news for local consumers like Sharon Monroe of McDonough.

"It's extremely high," said Monroe, who had just filled her tank at a local station Friday afternoon. "Normally it takes about 12 or 14 dollars (to fill the tank of her station wagon). I just paid $23, and I didn't even fill it up."

Dan Johnson, who lives in Newnan but works in McDonough, said the escalating gas prices have made him more conscious of how much he's driving.

"It has had an effect," he said. "I do try to pick things up on the way to or from work."

He also said that at a minimum of 100 miles round trip each day, the current prices are starting to hurt.

"We feel it," he said.