Archive for Saturday, August 23, 2008
Brenner questions gas prices
Senate candidate: Price differences in Northwest Colorado warrant answer
August 23, 2008
Craig — Gasoline prices in areas of rural Colorado don't seem to add up, Ken Brenner said. If he's elected to state Senate District 8 in November, he plans to find out why.
Exactly why gas could be about 20 cents more expensive in Craig than Steamboat Springs and about 50 cents higher in Glenwood Springs than Grand Junction is a question Brenner said he wants answered.
"What I've found out so far is there is no law in the books for consumer protection as to price gouging for gasoline," he said. "What it shows to me, we're going to have to set up a legislative committee after the election to look at this."
It doesn't seem like shipping distance is the only factor increasing prices in rural towns, Brenner said, because Glenwood Springs is about 85 miles from Grand Junction, but Steamboat is considerably farther and gas prices are cheaper.
"People deserve an answer as to why there is such a discrepancy in price," he said.
It is not about interfering in free markets, Brenner added. The ability of businesses to set their own prices for goods and services is a cornerstone of successful economies.
However, he added, most people would agree that the public should be protected from a business that holds a local monopoly and charges its customers an unreasonably high price.
"Many people have no choice but to drive to work, and they need to be treated fairly," Brenner said.
A legislative committee would be able to look at business records and determine whether a gas station was charging its customers an unreasonable price markup, he said.
From his research throughout the past couple of weeks, it appears a gas station's typical markup on fuel is about 20 cents a gallon, Brenner said. However, there also are stations that charge less than their costs for fuel to get people into the business, he added.
Unfortunately for communities that would like immediate answers, Brenner said there isn't much that can be done until after the Nov. 4 general election.
In the meantime, he said he plans to continue visiting residents in Moffat, Routt, Rio Blanco, Jackson, Eagle and Garfield counties.
"You just really don't have a sense who your constituents are until you meet them face to face," Brenner said. "There's no way you can read that in a voter summary."
Brenner does not have any set plans to visit Moffat County, but he said residents who would like him to speak and answer questions about his campaign platform can call his campaign manager, Joanne Tucker, at 846-5645 and setup a meeting.
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31 August 2008
at 3:42 p.m.
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mandmlarson (Anonymous) says…
I found it very convenient for candidate Brenner to blindly take shots at the small businessmen and women in the petroleum marketer business. Why doesn't Mr. Brenner simply talk to one of the local marketers before labeling them price gougers? This kind of political pandering is shameful and slanderous. Had the candidate visited with any retail location he would have found that several things enter into the pricing decision….credit card fees (now higher that ever equaling from .08 to .12 cents per gallon, or more than most marketers are making per gallon), securing credit (a load of gasoline jumped from $12,000 per load to $32,000 per load and suppliers want surity they will be paid) and local property taxes based on resort valuations (certainly higher than Grand Junction or Denver). Several other items factor enter into the current economic environment on the Western Slope including labor costs and regulatory mandates.
No other industry is as competitve as the petroleum marketing industry. No other industry has to post their prices on the street for everyone to see for blocks down the street…along with all their competition. While marketers may be enjoying a slightly higher margin while prices go down (by no means sufficient to pay their bills), it will not last for long. Someone is always wanting a bigger share of this declining market and willing to give gasoline away in order to get customers in their store. Demand is down due to high prices (and altered consumer behavior) and also due to higher mile-per-gallon vehicles. Retailers have experienced the worst margins this year since 1974. 75% of your gasoline dollar goes to the crude supplier. 10-13% goes to refining and distribution. 11% goes to taxes. This leaves only 2-3% for the retailer. 70% of a retailers gross sales come from gasoline from which they glean only 34% of their margin. Inside sales accounts for almost all of a retailers profit, limited as they are.
I hope the voters will recognize the obvious lack of due diligence done by this candidate. His intent to grab headlines (which he did) without doing any homework or simply asking a retailer, was damaging to an industry that is already reeling from sustainability issues. Once again, retail petroleum marketers are ignorantly labeled “big oil” when that notion could not be further from the truth. We do not need this kind of headline pandering politicain in Denver.
31 August 2008
at 11:33 p.m.
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lonelyone (Anonymous) says…
You make some good points. BUT, if what you say is true, then why is Steamboat, who has much higher taxes for property and such then we do here in Craig, charging less for gas then we do?? Most businesses in Steamboat are cheaper then us and sometimes it is a small amount and sometimes much more and yet they pay higher taxes?!?!!?
Now what is your excuse?
Retailers in Steamboat pay the same fees for the credit card machines as the retaliers in Craig do and yet the charge less for gas!?!?!?
I don't think Denver or Junction pay less for labor costs then we do and yet THEY pay less for gas then we do.
And had Mr. Brenner asked a retailer what was the reason for their higher gas prices, I'm pretty darn sure he'd have gotten the standard answer………..”we have no control or it, prices are set by corporate.”
1 September 2008
at 6:09 a.m.
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grannyrett (Anonymous) says…
Prices are set by corporate. But, look around Craig. How many places are there to buy gas? Other than the two bulk plants, there are 3 Kum and Go's, Gopher, Loaf and Jug, and Chevron. That's 6. Did I leave any out? The bulk plants aren't always cheaper than the others. There is no competition here. I don't know what the answer is. I gave up long ago trying to figure it out.