The price of driving
June 25, 2008 · Updated 5:35 PM
Despite unseasonably warm weather of the last several weeks, rising fuel and diesel prices may have drivers think twice about taking long Sunday drives.
As of Wednesday, unleaded gas prices in South Whidbey hovered between $2.16 and $2.20 a gallon, rising as much as 10 cents from a week ago. Mid-grade and premium unleaded gases cost an additional 10 to 20 cents a gallon. By comparison, two years ago, gas sold for about $2 a gallon on South Whidbey.
The gasoline price jumps are mild in relation to diesel prices.
Diesel fuel, which usually costs less than gas, reached $2.79 a gallon at McQueens Whidbey Marine & Auto in Freeland Thursday. That price marks an increase of nearly 80 cents from last month, said McQueens owner Marty Winn. During that period prices often rose nine to 15 cents a day, he said, although the price appears to be on the decline.
Winn and several other South Whidbey service station owners said the shutdown of three oil refineries in Anacortes and Ferndale for maintenance and other work earlier this year seemed to spark the rising prices. For Winn, the rising prices hurt business until the warm weather brought more people to his service station. Less fortunate has been Baileys Store co-owner Tom Eggleston, who said flat and declining gas profits have been the norm for years.
Gas prices follow the law of supply and demand, said Tyler Myers, operations manager for Myers Group, the company that owns a Shell service station and the Short Stop gas station in Freeland. Less supply caused by the shut down of the refineries drove the fuel costs up.
Oil companies executives sporadically raising oil prices, oil distributors seeking a profit and the nearly 50 cents per gallon in state and federal fuel taxes for the higher costs, Myers said. The additional price, or margin, gas station owners tack to make a profit after paying the oil company and distributor only makes it worse.
For at least one South Whidbey resident, though, the rising prices appear to be business as usual.
Clintons Katrina Collins said the increasing prices did not surprise her and she budgets her driving schedule accordingly. The budgeting includes consolidating errands into single trips and planning ahead for road trips. It costs her about $20 to fill up her 1996 Honda Civic.
To keep customers buying gas, the Myers Group other gas station owners must keep margins low when oil companies and distributors charge high prices.
Even with lower margins, people do not fill up as much.
As gas prices go up, less people buy gas, Myers said.
For example, at this weeks prices, Marty Winn said he earns a 7-cent profit on the sale of every gallon of gas before credit card charges and overhead reduce the profit to about a penny. When gas costs less than $2, he can raise his margin to as high as 13 cents and make a larger profit because more people buy.
It is a horrendous thing, said Tom Eggleston at Baileys Corner Store of gas prices. If gas wasnt part of the convenience business, I would love to be out of it.
In fact, Myers and Winn said, without their convenience stores, auto parts and other services, they could not afford to stay in business solely on gas.
South Whidbey service station owners must pay more than the state average for gas. The AAA Web site states the statewide average for unleaded is $2.09 a gallon, $2.17 for mid level gas, and $2.78 for premium. Only California, Hawaii, Oregon and Nevada service stations charge more.
According to AAA, the state average diesel price is $2.73, the highest in the nation. Oregon places second at $2.67 per gallon.
Although Katrina Collins is still driving, she noted that many people who drive to work on Whidbey Island could take a free Island Transit bus. A registered nurse at Whidbey General Hospital she only drives now because her afternoon-to-evening shift prevents her from taking the bus.
If I could get back to days and take the bus I would be a happy woman, Collins said.
She added that she plans buy an alternative fuel vehicle when she can afford one.