What's fueling big profits for local gas stations?
What's fueling big profits for local gas stations? Gas prices are dropping after Hurricane Harvey cut supply and pushed up the price. But we found data that reveals you may be paying more toward gas dealer's profits than drivers out of state.
The post Harvey spike in gas prices is over.
"I'm glad that its going down," said one South Burlington-area driver. "I'm really glad it's going down."
The average wholesale price for regular unleaded has dropped about 33-cents in the Burlington area since September 1st -- about a week after Harvey hit. The hurricane knocked out refineries, sending prices at the pump soaring.
"I definitely think that some gas stations raise their prices a little bit," said another driver we spoke to.
We wanted to know if prices here dropped as much as those across the country. We looked at data from the Oil Price Information Service (OPIS), a source respected by both friends and foes of the gasoline industry. It shows prices at the pump in the Burlington area are higher than the national average, but generally tracked the national price. From an average of $2.71 per gallon for regular in the Chittenden County area back on September 1st, to $2.58 last week -- a 13-cent drop at the pump. Nationally the price for regular dropped the same 13-cents per gallon over the same period.
But when you look at profit margin data -- the amount retailers are making per gallon -- there's a difference. You can see the national profit margin drop a bit more sharply than in the Burlington area. Since September 1st, the profit margins for stations here have been anywhere from 10-cents to 16-cents more per gallon than the national average. The latest data we have shows Burlington area stations are making 39-cents a gallon, while nationally the average profit per gallon is 26-cents.
Reporter Kristin Kelly: What would be some factors that would influence that?
Art Woolf: One factor may be there's not that much competition here among the retailers or the wholesalers.
Economist Art Woolf says Vermont's regulatory and business environment could also push prices up here. "Another may be it's just more costly to sell gasoline in Chittenden County -- land prices are higher, state regulations on capturing the fumes and doing all sorts of things are higher," Woolf said.
Woolf also says that consumers can influence the prices stations charge. If people seem willing to pay higher prices, there isn't much incentive to lower them.