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Friday, 07/04/2008
Gas Price Backgrounder

Gas Price Backgrounder w/Notes (PDF)

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Gasoline prices soar throughout region Print E-mail
Friday, 04/18/2008

By ROGER ADKINS

Gasoline prices across the Mid-Ohio Valley jumped as high as $3.65 a gallon Thursday as $100 fill-ups at the pump continue to become standard.

Most service stations in the area listed $3.65 for the price of regular unleaded fuel. There were a few exceptions, such as the gas station at Wal-Mart in Vienna, where gas was still $3.45 a gallon Thursday afternoon. The price at the Vienna Sam’s Club was $3.40 Thursday afternoon. The Emerson Avenue Speedway had regular unleaded fuel listed at $3.59 a gallon.

Randy Rapp, owner of Rapp’s Chevron, said the cost of oil by the barrel continues to climb. Rapp and Jan Vineyard, president of the West Virginia Oil Marketers and Grocers Association, both reported prices by the barrel at $114 or $115 Thursday evening.

“The barrel price of oil just keeps climbing. As long as that price goes up, the price at the pump is going to go up. It’s jumped 12 cents in the last two days,” Rapp said.

Rapp said he believes gasoline could be as high as $4 a gallon by summer.

“I didn’t believe they would get it to $4 a gallon, but now it’s getting close. It’s terrible,” he said.

Rapp said he receives daily price sheets for every brand of gasoline. No one is getting a deal right now, he said. The market is even across the board.

“There’s no one getting that advantage. Everyone is paying the same,” he said.

That means few retailers are able to provide gasoline at a lower price. As a result, more and more consumers are having to pay $100 at the pump to fill up larger vehicles.

“This concerns me a lot because now I’m seeing a lot of $100 fill-ups. If you drive an SUV or full-sized truck, it’s $100 to fill it up. That’s just to get you back and forth to work. That’s a big hit, I don’t care who you are,” Rapp said.

The high cost of gasoline will continue to affect the amount of money consumers spend on others things, which will have a negative effect on what customers buy inside the gas station, Rapp said. This is concerning because retailers are making more money from the sale of products inside the store than gasoline because of the high cost they must pay to stock fuel, he said.

The increasing cost of groceries and sundries as a result of high gas prices means inside-the-store sales might not be as profitable in the future, Rapp said.

“The other thing that concerns me is we’re getting fuel service charges on almost every product. Milk, pop, all of our sundries. There’s no way to get around that. In the past you’d have one or two vendors who do that. Now it’s pretty much standard. Even the service people who come in to work on our air conditioning charge a fuel-service fee. Everyone’s passing that fuel charge on. That’s a big expense,” Rapp said. “Everything adds to the bottom line, you have to cover that somewhere.”

Rapp and Vineyard said retailers are being affected by the increasing number of people who use credit cards to pay for gas purchases.

“The average consumer doesn’t usually think about this, but everyone is using their credit card to pay for gas now. It costs me 10 cents a gallon for you to use your credit card to pay,” Rapp said.

That can be a problem when Rapp is paying $3.55 a gallon for gas and the going rate is $3.65, he said.

“Last year the credit card companies made more off of gasoline purchases than we (retailers) did,” Vineyard said.

Vineyard said she’s shocked by the current price of crude oil.

“The biggest spike right now is in crude oil. It just blows my mind. For every $1-dollar-a-barrel increase, that generally translates to 2 or 3 cents at the pump,” Vineyard said.

 
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