Gas price reality: It’s not pretty, but it’s not ‘gouging’
I recently read an unfortunate letter to the editor printed in the Tahoe Daily Tribune on Wednesday, May 16, claiming that Tahoe gas stations are gouging customers by raising their gas prices. Price gouging is actually illegal in certain instances and throwing this term around is inflammatory, especially when the facts don’t support the claim at all.
It’s unfortunate that these unfounded claims weren’t researched, because it is very simple to do, especially in today’s environment of constant information.
I Googled “Why did gas prices spike in California last week” and an article titled “Why did gas prices shoot up in the last week?” from katu.com was promptly displayed right on top.
The article stated that the West Coast has its shortest supply of gas in 20 years after four oil refineries in California were shut down for their annual switch to their “summer blend” gas and, during that time, workers discovered mechanical problems that required the refineries to be shut down longer than usual. It also stated that the largest oil refinery in Washington was shut down after a fire in February and officials are having trouble getting it back online.
“According to the latest stats from the U.S. Department of Transportation, the West Coast has the lowest gas stocks for the month of May since 1992,” AAA spokeswoman Marie Dodds stated in the article.
If you do a little more research, you would see that, according to AAA, California gas prices averaged $4.366 on May 17, which is up significantly from last Friday.
The editorial specifically applauded Raley’s for not raising its price, but it has raised its price more than 12 cents to $4.279.
Most stations in Tahoe are selling as below the California State Average, hardly a situation in which the word “gouging” should be used. These stations should all be applauded for being below the state average. Several stations are just pennies above the state average at $4.39 and they should be applauded, too, not criticized.
The South Lake Tahoe average is $4.281 and the Truckee average is more than $4.70 per gallon.
Prices in Reno average $4.113 and their state fuel taxes are significantly less than California (Google it – http://www.quora.com has the answer around 33 cents in fuel taxes, “Why is gas 50 cents more expensive in California than Nevada;” Wiki Answers also has a similar explanation that states that “everything in California costs more due to regulation”). You can also check out national average prices at http://www.fuelgaugereport.aaa.com.
What I saw was gas stations reacting to extreme market conditions, the likes of which haven’t been seen since 1992. Last week, California ran into a major fuel shortage and the spot market exploded on Thursday and Friday. Some stations reacted right away on Thursday, some Friday, some Saturday, but they all went up at least 12 cents in one day.
Google the data for yourself, it’s all here and next time, if you ever have questions about fuel prices, just ask the employees and managers at Roadrunner. They are informed about what is going on. Last week we displayed a May 9 article from Bloomberg titled “San Francisco Gasoline Advances to Record High on Tight Supplies,” which stated that fuel prices were exploding in California. We prepared our customers for the increase and recommended that they get fuel immediately.
Our May 11 invoice is also posted in the store, our cost per gallon was $4.3866, street price $4.390, not including credit card fees, which can be 10-15 cents per gallon, with plastic we lose money, with cash we lose less money – not sure how that can be defined as “gouging.”
Next time you see prices move and you are concerned, ask the employees of Roadrunner and they will tell you exactly what you want to know. It’s no secret; we publish our retail price right on the street.
– Mike Murphy is the owner of Roadrunner Gas & Liquor in Meyers.