Gas prices climb, but Douglas consumers still paying less
There’s good news and bad news about Carson Valley gasoline prices.
The bad news is, prices are up again. The good news is, the fast spike in prices that began less than two years ago seems to be leveling off, and motorists are paying slightly less, on average, than the nearest community.
The highest price in the Carson Valley Friday was $1.89, $1.99 and $2.09 for unleaded, unleaded plus and unleaded premium, respectively, at four stations -Shell, Chevron, the Carson Valley Inn’s Union 76 and the Riverview 7-Eleven.
In Carson City, corresponding company stations – Shell and Chevron – had their gas priced at $1.93, $2.03 and $2.13.
Douglas County and Carson City have different gas taxes, with Douglas County a nickel less than Carson City, according to Bob Nunes, director of Community Development for Douglas County.
State law allows each Nevada county to add up to 9 cents per gallon to their gasoline price – the county option price – for use in road construction, maintenance and upkeep, he said.
Carson City has approved the use of the full amount, while Douglas County voters have only approved 4 cents of that 9-cent potential.
“So, really, our gas should be 5 cents lower than Carson City’s,” Nunes said. “We regularly do surveys to see what the difference in price is betwen here and Carson City, and most of the time the difference is only a penny or two. The county has no control over the price of gasoline here, though.”
n Continuous rise in price. On Feb. 17, 1999 – only 17 months ago – the lowest price for unleaded in the Valley was reported at 91 cents per gallon for unleaded. By April, that price had jumped to $1.45 and 11 months later, the price had risen again to $1.77.
Friday, the lowest price in the Valley was found at the Arco station by Lampe Park, at $1.81, $1.93 and $2.05, and in Carson City, the independent station, Pump ‘N’ Save, was only slightly lower, $1.79, $1.89 and $1.99.
Only the CVI Union 76 station has held the same price since April at $1.89, $1.99 and $2.09. Friday’s prices at the other stations in the Valley include: Ranchos Seven-Eleven, $1.87, $1.97 and $2.07; Silver City RV: $1.85, $1.95 and $2.05; and the Minden Beacon, $1.87, $1.99 and $2.09.
n Who’s to blame? Gasoline price experts have continued to blame high prices on a decline in world production of crude oil by the Organization for Petroleum Exporting (OPEC), combined with an increasing demand from U.S. consumers.
Steve Yarborough, president of the Nevada Gasoline Retailers Association, said that is only part of the picture.
“The oil companies set the wholesale price for the area,” he said. “Then, each individual gas station operator has different costs that they have to meet and they can adjust their price to within a penny or two at the pump site.
Yarborough, who owns several Union 76 stations, said even within a company there can be a variation in retail prices. Many companies have pricing zones for competition.
“I operate stations in four different zones – Truckee, Incline, Reno and Sparks – and they all have different prices,” he said.
Yarborough said that although each station owner can set their gas price, the bottom line is, if a price is too high, the customers drop off.
“If I raise the price too high, the impact will be on my volume,” he said. “It’s a free enterprise system, though.”
Yarborough said out of $2 per gallon at the pump, the government gets 52 cents, the credit card company gets 6 cents (if a credit card is used), and right now the commodity price for gasoline is between $1.17 to $1.30 per gallon, depending on the zone.
“The retailer is making, maybe 5 cents on a gallon, and they have to pay for rent, maintenance, salaries, credit card fraud and liabilities out of that,” he said. “Plus, with these high prices, everybody hates you. It’s not a fun business to be in right now.”
n Big picture. Yarborough said he is concerned about the bigger picture of heating oil and gasoline in America.
“We station owners read the same news stories everyone else does,” he said. “I just read that in the East, because they’re predicting a possible heating oil shortage this winter, people are stockpiling wood and storing heating oil in 55 gallon drums. There’s every indication that prices will continue to go up, the barrel price is at $33 to $38 per gallon right now and they’re talking about opening the federal reserves for only the second time in history. It’s frightening.”
Yarborough said the increase in vehicles with poor gas mileage – SUVs, big trucks, RVs, muscle cars – have likely contributed to the state we are in now with gas limits looming.
“It’s a cycle, and it’s like we’ve forgotten what happened in 1973 and 1979 with gas lines,” he said. “People who bought these vehicles are now in shock when they have to spend $60 to $70 to fill their tank. Soccer moms used to drive their kids in minivans and now they’re using Suburbans. That’s probably going to change. I can see the possibility of allocation coming, just like in 1973 and 1979.”