Pharos-Tribune

June 2, 2012

Debating the price of gasoline


— One of the quickest ways to start a heated discussion in Logansport is to bring up the price of gasoline.

Lots of folks complain about the fact that the gas prices in neighboring communities are significantly lower than the prices here.

For several years, we’ve been following the prices in surrounding communities with our weekly Gas Gauge feature, and week after week, Logansport ranks toward the top of the list.

So what causes that?

We’ve printed numerous stories through the years exploring that question, and the answer we keep getting is that the price is a product of the free market. Basically, the price of gasoline in any community is controlled by what the market will bear.

Gas stations close to each other tend to price their gasoline competitively.

In larger cities, you’ll often encounter a range of prices of as much as 50 cents. I remember living in one community where the gas stations near the interstate consistently had gasoline priced at least 20 cents higher than the stations in other parts of town.

Sometimes, a gas station that is tied with a supermarket or a big box retailer might sell gasoline at little or no profit as a way to lure customers to the store, and as a result, gas stations in the area nearby are forced to drop their prices just to compete.

Station owners also point out that the prices charged to gas stations vary by market. The gas stations in Logansport might be charging more for gasoline, they say, but they are also paying more for the gasoline they sell.

It’s a complicated issue with no clear explanations.

Now and then, someone in Logansport will get mad enough about gas prices to write a letter to the Public Forum or even file a complaint with the attorney general’s office accusing local gas stations of price gouging.

The stations vehemently deny that charge, saying they price their gasoline in line with the market, and just to be clear, the attorney general has no real authority over the day-to-day pricing of gasoline.

The state’s price-gouging law deals with gasoline prices immediately after the declaration of a state of emergency, and it’s intended to make sure retailers don’t profit from a natural or man-made disaster.

Some years back, a group of customers tried to organize a campaign to take all of their business to a single gas station. Their hope was that the move would encourage the stations all over town to lower their prices, but the effort had no lasting impact.

Some customers say they do steer clear of local gas stations. They say they make a point of driving to surrounding towns to take in a movie or buy groceries so that they can also take advantage of the cheaper gas.

In today’s Public Forum, reader Charly Small suggests that local residents take their business to Monticello in hopes of sending a message to the stations in Logansport.

It’s a round trip of just more than 40 miles, which, depending on gas mileage, might take in the neighborhood of two gallons of gas. At that rate, with a 38-cent difference in price, you’d need to buy about 20 gallons of gasoline just to break even.

Of course, anything over that would be profit, not counting the wear and tear on your vehicle from making the trip.

This week’s poll question asks the question: Would you be willing to drive to a neighboring community to save 40 cents on a gallon of gas?

You can cast your votes by visiting pharostribune.com. You can also share your thoughts on gasoline prices by sending a letter to the Public Forum.

What do you think about the price of gasoline in Logansport? Have the prices caused you to consider shopping elsewhere, and if so, what impact do you think that will have on the local economy?

• Kelly Hawes is managing editor of the Pharos-Tribune. He can be reached at 574-732-5155 or kelly.hawes@pharostribune.com.