Gas prices reach all-time high in Tahoe
February 18, 2003
War jitters and a decrease in supply because of an oil worker strike in Venezuela have combined to double the price of a barrel of crude oil over this time last year.
Gasoline on the California side of the Lake Tahoe Basin, some of the highest priced fuel in the country, is generally more expensive than fuel sold at the Nevada side of the basin because it must be reformulated to meet stricter air quality standards.
Gasoline sold at the basin cannot contain MTBE, methyl tertiary butyl ether, a fuel additive banned in 2000. But that doesn’t have a noticeable impact on prices at the pump, said experts from both states.
“I don’t think that makes that much difference now,” said James Hickey, owner of Union 76 in South Lake Tahoe and four gas stations in San Diego. “All the other companies are getting rid of MTBE — gas prices now have really nothing to do with MTBE.”
What does affect pump prices is how much suppliers jack up the prices to their buyers, who are gas station owners. They must maintain a certain profit margin to stay in business, said Al Moss, owner of Chevron at Ski Run Boulevard.
“We just received another 5 cent increase this morning,” said Moss on Monday morning when a gallon of regular unleaded at his station cost $2.23. “This is the highest I’ve ever seen them and I’ve been in the business 41 years.”
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Moss said he is selling 27 to 30 percent less gasoline than he normally does this time of year. He believes the business is going to Carson Valley where large corporations such as Costco can afford to sell gas and not make a profit.
“My wholesale prices are set by Chevron, what they sell it to me for I have to base my retail price on that,” Moss said. “So as it goes up and they’re passing the price onto me and I’m passing onto the motoring public … And it’s going to get higher.”
Competition from independent stations is what can often lower gas prices in an area, said Jason Toews, co-founder of http://www.gasbuddy.com, a Web site that tracks gas prices throughout the country.
But Toews agrees with Moss’ prediction that prices will continue to go up because of the shaky labor market in Venezuela and the threat of war in the Middle East.
“Anytime there’s uncertainty in the Middle East, it always affects the price of crude oil,” Toews said. “I know Iraq produces 2 million barrels a day and the entire world produces about 70 million.
“You stop all supplies coming from Iraq or affect the countries around it like Saudi Arabia and Kuwait and you could see record prices this summer.”
Prices also have increased at independent gas stations at South Shore. Lake Tahoe Oil Company at Round Hill, usually the cheapest in the area, sold its regular gas for $1.94 per gallon on Monday.
“I noticed these guys were going up and thought, ‘Uh-oh, this is serious,'” said Paul Bronken, who works as a dealer at Stateline and lives on Kingsbury Grade. “This is the only one that tries to keep it as low as possible.”
Hickey said he is working to keep prices at the Union 76 less than $2 but he doesn’t think he’ll be able to succeed much longer.
“I don’t know if it’s possible, I only make about 8 or 9 cents a gallon, there’s not very much margin there to make a profit and pay the bills,” Hickey said. “The worst thing that’s killing me are credit card fees. It’s 3 percent card fee so if they buy 10 dollars of gas that’s 30 cents goes to the credit card company.”
— Gregory Crofton can be reached at (530) 542-8045 or by e-mail at email@example.com