Web site helps drivers beat the pump
For most people, an increase of $.02 in the price of gasoline means taking an additional $.30 from the car ashtray. For those with larger tanks, it could mean an additional $1.50.
Audie Wheeler, CEO of Advanced Transportation in Park City, said those two cents mean several thousand dollars.
"Each penny is important when you’re in the taxi business," he said. "We’ve switched to mini-vans to be more fuel conscious and we’ve had to hold off on buying any additional SUVs because of the cost of fuel. It’s the sole reason for any rate increases we have. We were very comfortable where we were at because we didn’t see any inflation anywhere else. Gas is where it hurts."
Wheeler said he sets his rates each November, and that because of gas prices they will increase to accommodate.
"I was just down in Phoenix and I paid $2.30 a gallon," he said. "It felt good while I was down there, but I was pretty angry when I came back and I had to pay $2.90."
Gas prices haven’t been doing Wheeler any favors over the last year, but he has taught himself to be optimistic and find the silver lining.
"It is a double-edged sword, with the gas prices being where they are," he said. "People tell me they didn’t rent a car because they didn’t want to pay for gas, so instead they take a taxi. Our quantity has gone up, which is good, but our margins have gone down."
According to utahgasprices.com, the average price for a gallon of regular gasoline in Utah is just below $2.70, nearly $.40 above the national average. Many point out that although Utah is behind, prices are dropping; however, prices are also dropping across the country.
According to the Web site, as of Sept. 29, Davis County ($2.67-2.68) has the lowest average price in the state, followed by Salt Lake and Utah Counties ($2.68-2.70).
Sanpete County ($2.79-2.80) has the highest prices, followed by Summit and Iron Counties ($2.77-2.79).
Utahgasprices.com is one of 178 local gas-price sites run by gasbuddy.com. The site tracks for individual gas stations so consumers will know where to find the cheapest gasoline.
The site’s co-founder, Jason Toews, said they rely on price spotters volunteers unaffiliated with the site who report gas prices to keep their site up to date.
"I was always frustrated when I filled up with gas and then drove down the street and saw it for $.10 cheaper," he said. "I kept thinking, how can I know when it’s cheaper somewhere else? We thought about it and figures there is always someone who has driven down the street before us who can log on to the site and post the prices of local stations, that way you can know where to go before even leaving your house."
Toews said the company monitors the site continually, just in case any false prices are posted, although he said it only happens rarely. Although users don’t have to register and the site is free, he said most people are on the site because they want good information, so they help to gather it and pass it along to others.
Utah has 5,096 registered users on the site, and countless others who help to track prices but have never formally signed up.
Toews said since starting the site six years ago, he has found that the stations that sell less expensive gas, do so regularly, in part because of what he called "pockets of competition."
"There are areas that drive each other lower," he said. "There are other stations that sell the gas for a loss, or close to a loss, in order to drive in business to something else, like Costco, who sells gas pretty cheap in order to get people in their store."
He said he has also found more fluctuations in prices nationally than he originally expected.
"One of the most interesting things I’ve seen is that gas prices vary quite a bit across the country and within each city," he said. "I’m from Minneapolis and the prices here can be a difference of $.40, just depending on where you are in the city. It looks like, right now, there is a $.34 range in Salt Lake City."
Although prices are decreasing across the country, Utah has been slow to follow. It even caused Gov. Jon Huntsman to call for a special investigation into the cost of gas in Utah. The investigation is not yet finished, but preliminary results have led to the thought that much of the problem is with individual station owners and corporate price setters.
Phil Geary, store manager at Bell’s Silver Creek convenient store, said most gas stations in Summit County likely make between zero and $.08 per galloon.
"I make more on selling a Blimpie sandwich than I do on a full tank of gas. If you were going to run a station on gas profits you’d be broke in 6 months."
Debbie Ceriello, manager of Terrible Herbst, No. 248, concurred. She said when she gets to work every morning she drives around and scopes out the prices at nearby stations, and then reports them to Chevron corporate headquarters, which tells her where to set the prices at her store.
"We get our price changes from Chevron," she said. "Gas may be sold for more to us in Park City than it is to a Chevron in Salt Lake. It’s even different if there’s another store down the street. Different needs have different prices."
It all comes down to whether each station can choose where to buy its gas, or if they are under contract to a specific company, she said. Prices also hinge on the company and the quality of gas.
"Every gas company is different and each puts a different additive or detergent into their gas," Ceriello said. "When a company uses higher grade additives it will have to charge more for it."
"But the taxes are also a huge part of the cost," she continued. "Maybe it starts for $.50 a gallon, but then it has to go through a prepay tax, a purchase tax from the owner, and at the pump. In reality, the gas is getting taxed on the way in and the way out. It’s the same with cigarettes."
Alan Isaacson, research analyst for the Bureau of Economic and Business Research at University of Utah, said that although a $.03 difference in gas prices won’t have a large impact on the economy, he has watched as the prices have gone up $.03 per week for a couple of years, which has constituted a jump of almost $2.
"That has a large impact on the economy, especially on the general dramatic climb in energy prices," he said about the increase.
He said that although America operates in a free-market economy, gas prices defy all the rules because almost all stations keep their prices high, even when they could be lowered.
"Refineries have dropped prices to retailers, so why the price drop is stalling at the pump is a mystery," he said. "I think in the next couple of weeks it will work it’s way down. There will undoubtedly be some stations that lower their prices to get more business, but I’d give it a couple of weeks before we see all of them drop noticeably."
He said many companies justify keeping prices high after oil prices have dropped because the companies claim they are selling gas that was more expensive to purchase, even after the prices have gone down. For example, a station may purchase a gallon of gasoline for $2.00, after which the price drops. Since that gallon of gas was more expensive, prices stay high until it is sold.
Isaacson said that is false reasoning.
"The idea that they have the more expensive gas in the tanks and they have to keep prices high until it sells flies in the face of all established economic theory," he said. "It should be the current supply and demand, not the past price, that dictates. If you try writing that theory on a midterm in Econ 105, you’ll fail the test."
Although he said the Western United States will likely always have higher prices because they are isolated, he said it could always be worse.
"If it makes anybody feel better, I was in Vienna, Austria, in July and I did the math on their prices and they was a little over $7 a gallon," he said. "Be thankful for what you have."
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