Island gas prices stay up

By MATT JOHNSON

Record editor

Talking to customers about the price of the gasoline he sells is not a lot of fun for Tony Yang.

Yang, who owns the Clinton Square Chevron, actually doesn’t waste a whole lot of time anymore explaining why gasoline at his store is up to 40 cents more expensive than fuel sold 2 miles across the water in Mukilteo. Lately, he’s just been pulling out his most recent fuel purchase invoice from his wholesale supplier and showing it to customers.

“My price is kinda too high right now,” Yang said almost apologetically Monday as he pointed out the wholesale price of $1.46 a gallon he paid for his last delivery of regular gasoline.

But what to do? Gas prices are high on South Whidbey and it’s been this way for years, according to Yang and other local service station managers. They’re not gouging customers, they say, but they are charging enough to make a small profit on what they claim to be unfair prices from fuel suppliers.

It sure seems unfair. In Mukilteo a gallon of gas can be had for as little as $1.19 a gallon and in Oak Harbor prices just touch the $1.40 mark. On South Whidbey, drivers in need of a fill up couldn’t do any better than $1.47 this week. At Yang’s Chevron, the going rate was $1.56, a price that gives him a 10-cent profit margin on each gallon of gas he sells.

The money in his business, he said while gesturing to the items in his convenience store, is definitely not in gasoline.

“It’s pretty tough on the island,” he said.

The story is about the same every year. Last January, the price of a gallon of premium fuel flirted with $2 on South Whidbey, prompting complaints from service station customers. This year it’s no different, even though the price is lower. Gas prices have risen steadily since Dec. 12, growing by 12 cents a gallon for several brands, according to one fuel wholesaler doing business with island service stations.

An oil industry strike in Venezuela is part of the problem; OPEC’s unwillingness until recently to produce more oil is another. But the biggest reason why South Whidbey drivers pay more for gas is this: Fuel companies can get away with charging more here.

“If they can get more, they’ll take more,” said Frank Pupo, Jr., co-owner of Associated Petroleum Products in Tacoma.

APP, a wholesaler of Chevron, Exxon and Shell brands that sells 100 million gallons of gasoline annually in Western Washington, supplies most of the service stations on South Whidbey. Prices for fuel vary from brand to brand, but all are up from last summer. Pupo said there is a simple reason why island prices are so high compared to those in nearby communities: Location.

Somewhat isolated and lacking a highly competitive market, South Whidbey service stations are considered by major oil companies, Pupo said, to be the place to charge high prices. At the same time in more competitive markets, companies such as Aarco and 7-11 can discount gasoline at retailers by giving out rebates — which allows them to sell gas at a retail price that is sometimes equal to or lower than the wholesale price.

While according to station managers those low prices lure a good deal of fuel business to the mainland, Pupo said the fuel companies can still count on a population of island drivers who have the time or opportunity to make that choice.

Denise Hunt, manager of the Short Stop Texaco in Freeland, said she wishes it wasn’t so. Though she said gas prices at her pumps have been fairly steady, she still hears complaints about $1.49-a-gallon gas. She said she wishes she could get a price break from her wholesale supplier or Texaco. But it’s probably not going to happen.

“We don’t see much in the way of kickbacks or rebates,” she said.

It’s not unusual for people who live or work outside of the area to only put a few dollars worth of gas in the tank on South Whidbey to tide them over until they reach a service station with lower prices elsewhere. One Oak Harbor man filling up at the Short Stop yesterday did just that, paying for his five gallons, then heading north.

At an Exxon station at Bayview, Glendale resident Rachel Olson was a more philosophic as she filled the tank of her Toyota 4-Runner. Having spent time driving and buying gasoline in Europe in recent years, she said there is little point in complaining about prices here.

“I don’t feel bad about the price,” she said.

Pupo said he expects gas prices to continue to rise in the foreseeable future, especially if tensions between the United States and Iraq turn into a war.

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