Motorists reap rewards in latest gasoline war

by Heather Fors

A war has ensued among several local service stations to offer motorists the lowest prices in gasoline. While stations in northeast Minneapolis and St. Anthony are among the major participants, University drivers continue to benefit from shrinking prices.
And with crude oil prices decreasing and a number of service stations sharing the same area, some feel the war will continue and that prices will fluctuate.
“It’s partly to do with refineries making more gas than people are using and also competition,” said Matt Hackathorn, a media relations representative for SuperAmerica.
But some service station owners are concerned because the price wars are hurting profit.
“You gain gallons but you’re not gaining profit,” said Mark, a partner of the Stop-N-Go station at 800 W. Lake Street, who asked his last name be withheld.
Officials said there are three factors when determining gas prices: the cost of the crude oil, federal and other taxes and expenses of getting the gas to the public.
By the time the gas gets to motorists, it now costs the gas station about 83 cents per gallon, said Stan Lampe, a spokesman for Ashland Inc. This is considerably lower than the prices last year at this time of at least $1.40 per gallon, he said.
Now the retail price averages around 98 cents per gallon around local stations. And the stations continue to change their prices.
Lampe agrees. “The retail gas business — for the last 30, 40, 50 years — has always been a penny-per-gallon business. The only way they make a profit is in the long term,” he said. “When there’s lots of competition the consumer profits.”
“If there was no competition the prices would be high because (other stations) would be high,” said Mark. “Up until two years ago we were making 24 cents a gallon.”
Now, since there are several stations in the area, businesses are making significantly less in an effort to compete with each other.
Scott Myren, the store manager at the E-Z Stop on 1617 NE Broadway Street, said that the prices have been that way since Christmas Eve. Myren said that every morning each gas station does a survey of the competition’s prices and change their prices accordingly.
Mark said his station will usually wait a couple of days and raise its prices again. E-Z Stop goes down, then SuperAmerica will go down to match it — and the cycle just keeps going.
This lowering of gas prices has also benefited University students and employees who drive to campus. However, some say convenience is still a major factor in deciding where to buy gasoline.
“I try (looking for the lowest gas price) but I end up going to my usual spot just out of habit,” said Doug Cole, a temporary worker at the Mayo building. “If prices would stay low for weeks and months it’d be worth it.”