Re: Fuel Prices

[WMSteed@aol.com]

On page 4A of the Dec. 3 issue of Moscow-Pullman Daily News was an AP article 
entitled "Gas station owners say they have little control over gas prices."  
It should be required reading for all of us who have fumed for decades over 
gasoline prices in Moscow.  

It follows a story I first saw in USA Today last summer.  Although talking 
about Seattle, it stated gas prices in parts of the West are set by zones due 
to a lack of competition among suppliers and gas stations.  The companies 
that refine the oil also transport it, distribute it and sell it, either 
themselves or through others.  It said Washington's four suppliers keep 
independent distributors from selling the cheaper gas inside King, Pierce and 
Snohomish counties.  The suppliers sell under the names Arco, Shell, Texaco, 
Chevron, 76 and now Tesoro.  Gas stations are charged varying prices for gas 
under a computerized "zone pricing" system.  Oil companies do not disclose 
detail about how prices are set by the system but it can result in  different 
prices at nearby stations.  I believe this is what is happening in Moscow as 
it would explain the difference between, for example, Moscow and Lewiston.  I 
paid $1.19 yesterday in the Valley and saw $1.31 when I got to Moscow.  
Moscow has two prices with a large group of stations all at one price and a 
couple of stations a penny lower.  Remarkedly, this never changes, year in 
and year out.

The article goes on to say higher gas prices are caused by the major oil 
companies who restrict access to gasoline and then use zone pricing to 
maintain the highest possible prices at each location.  Some of you may 
remember a story several years ago that Go Further Gas at Mountainview and 
White Ave. had their supply pulled for selling at too low a price per gallon. 
 The article concludes, unfortunately, with the information that the courts 
have backed the zone pricing practice and in May the FTC closed a three year 
investigation of zone pricing in Washington, Oregon, California, Nevada and 
Arizona after determining that large oil suppliers had broken no antitrust 
laws.

What really amazes me is that local stations continue to give out the party 
line that the high prices are due to "only having nine months of students 
requires higher prices to make a profit, that it is due to high local taxes 
or that we are not on a major highway."  Apparently the oil companies have a 
strangle-hold not only on the price at the pump but on information as well.

Walter Steed