October 25, 2014

Rising gas prices defended

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By Kim Howard
Correspondent

Williston gas station owners say they are not to blame for skyrocketing prices, though they are still hearing a lot about the high cost of refueling.

“It’s not easy,” said Joe Marriott, manager at the Short Stop Mobil at Taft Corners. “All five of my cashiers are stressed out” from dealing with customer complaints and keeping an eye out for people driving off without paying.

Mario Herceg, manager of Simon’s Plaza Store and Deli, concurred. “We hate for the gas prices (to be) this high,” he said.

“Some customers think that we are changing the prices,” Herceg said, noting that he had changed the price sign four times in the preceding week. However, “gas station owners and managers and employees have nothing to do with these gas prices,” he said.

In the wake of Hurricane Katrina, which damaged Gulf Coast refineries and pipelines, prices spiked sharply to more than $3 a gallons last week. The jump comes after a steady rise in prices over the summer amid increases in the price of crude oil.

This week, “every single time you get a delivery, you get a new price” from the supplier, Herceg explained. Local station representatives who agreed to be interviewed indicated that deliveries range from two times a week to daily, sometimes even twice a day.

S.B. Collins of St. Albans, which supplies gas for three of the five gas stations in Williston, including Simon’s, did not immediately return a phone call for comment. A.R. Sandri of Springfield, Mass., which supplies gasoline and leases the station to Clark’s Sunoco, also did not respond.

However, Bradford Oil Company, supplier for Korner Kwik Stop in Williston Village, did comment on the role of suppliers in rising gas prices.

“The suppliers are in the same boat as the retailers,” said Richard Browne, general manager of the Bradford-based company. “The reason the retailers’ costs have gone up is because our costs have gone up. What we pay when we pick up a load of gas for a station has gone up in some cases by as much as a dollar in the last week.”

“It’s somewhere before there, that anybody’s making any money,” Browne said, referring to where they load the gasoline.

Shane Sweet agreed. “The money is being made way, way upstream,” said Sweet, the executive vice president and director of the Northfield-based Vermont Fuel Dealers Association. “I can say categorically that there’s absolutely no party for anyone in Vermont. It’s really expensive to be in the fuel business.”

Allen Lemieux, who leases and owns Clark’s Sunoco, explained how in fact he is making less money as the price of gas goes up.

“As the dollar amount gets higher, I pay higher credit card fees,” Lemieux said of purchases made at the store, which has been operated by the Clark family since 1984.

For each credit card used, Lemieux pays the credit card company a percentage of the total purchased. With last week’s gas prices, Lemieux estimated he was paying nine cents per gallon in credit card fees, but only making back “pennies a gallon.” For debit cards, Lemieux said he pays 35 cents per usage just for swiping the card.

“We’re talking $7,000 a month in fees I’m paying,” Lemieux said.

Though Lemieux acknowledges that eventually A.R. Sandri, their leaser and supplier, will adjust Lemieux’s rent so that he breaks even on gasoline, the gas price increases may still have a negative effect on his ability to turn a profit.

“We make our money in the store,” Lemieux explained, from sandwiches and other goods. “My biggest fear is that as their wallets dry up because they’re putting it in their gas tank, (people) won’t buy other things in the store,” he said.

A number of Williston residents surveyed late last week indicated their behaviors will change as a result of rising gas prices.

Heather Burnett, a University of Vermont student who also works at Circuit City in Williston, filled her suburban SUV at Clark’s last week when gas there was still only $2.99 per gallon.

With the rising gas prices, “I won’t be going anywhere,” said Burnett. “No extracurriculars. No weekend activities.”

Those in the fuel industry say that with behavior changes like Burnett’s, consumers do have some control over gas prices.

“This is entirely a supply and demand situation,” Browne said. “If demand for the product declined, prices would decline.”

Sweet said that individual consumers can make a difference in the short-term by “breaking your habit or your routine when you fill up.” If you have half of a tank of gas, that’s enough, he said. “People just shouldn’t contribute to the problem.”

Over the long term, “what the consumer can do is just to be smart,” Sweet said. For example, people need to begin looking at the type of vehicle they drive, he said, and consider alternative fuels like biodiesel.

“It’s not the be-all, end-all,” Sweet said. “It’s just another tool in the toolbox.”

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