Why Are Gas Prices so Expensive Here?

Just hearing "gas prices" can get people all riled up, especially people in Western Wisconsin.

That's because if you drive around the area, or check prices on the internet, you'll notice gas prices are cheaper in other parts of the state.

So why is that?

On Wednesday night, gas prices in Eau Claire were hovering at $3.19 a gallon.

According to gasbuddy.com and wisconsingasprices.com, gasoline was running about $3.14 in the Madison area, and $3.06 in Milwaukee.

So why do we pay so much more in this area, and where is your hard earned money going? We tracked down a local fuel distributor and a convenience store manager to find out.

It's $90.00, and at least three trips each week to the gas station for Chad Herman, 32, of Altoona. He's a real estate agent and does a lot of driving.

"I'm on the road very often, up and down the highways 24/7.", he told us.

Herman spends most of his days in Chippewa Falls.

"I'm going back and forth to the post office. I'm going back and forth to home. I'm going to meetings in the cities and it adds up", Herman says.

Chad says it gets tough when there's so much traveling and not enough money.

"We definitely had to adjust the budget for it thats for sure", he commented.

So if Chad is paying so much for gas, are gas stations in the area making money?

According to John Salden, owner of DJ's Marts, the gas market isn't that great. He's been in the business for 17 years.

Saldens says, "The reality is we're able to make a living but there is no gas gouging going on by any means."

Salden owns three convenience stores and also distributes wholesale fuel. He says he gets his gas mostly from Green Bay and Chicago because it's cheaper.

"Chippewa falls where we're located you can kind of technically say we're near the end of a pipeline. We're at the hardest to supply area", he said.

He says that's also why people across the state pay less at the pump than we do.

"The southern and eastern part of Wisconsin would be cheaper than us simply because they're fed off of a different pipeline. They're fed off of the Chicago pipeline and there are just less costs associated", he said.

Salden says, it costs more to fill his trucks at Minnesota refineries. That's because it costs more to pump the fuel from the coast to Minnesota. That in turn, increases the wholesale price.

"There's a higher cost associated with getting product that much further up the pipeline", he explained.

And Salden says we pay more in general in Wisconsin because of gas taxes. Breaking it down, here's what you pay for.

For each gallon of gas you buy, 30.9 cents go toward state taxes
You pay another another 18.4 cents for federal tax.
When you total it up, that means you're paying 49.3 cents for every dollar, just in taxes.

So how much do gas stations pay to buy a gallon of gas? River Country Co-op District Manager Jim Jones has been in the gas business for 20 years.

On the day we talked to him, he was selling gas for $2.89 a gallon at the Pines 29 station.

But he says when you figure that he bought that gas at a wholesale price of $2.20 a gallon, and then add in taxes, credit card fees, and transportation fees, he was actually losing money.

He says gas prices are also based on the market you're in and Wisconsin's controversial minimum mark up law.

"If we're not at 6 percent we can match and that's where you get the matching thing. We can't be cheaper because some days we're only 2 percent. So everyone is matching everybody to stay at whatever percentage we're at. We're very very seldom above the 6 percent", Jones said.

And Jones says if he goes lower than his competitors, he's risking paying some $20,000 in state fines.

"We don't want to be the highest in the market, but if we're not 6 percent we want to move when someone moves because you're not making up on the fuel", he explained.

Jones says the 29 Pines convenience store has a 120,000 gallon tank. The fuel stored can last up to four days--if it's not too busy. Otherwise, he says he'll go through an entire tank every other day.

A federal judge recently ruled the minimum mark-up law is unconstitutional, because the state hasn't been monitoring it.

Some legislators have also said publicly they'd like to repeal it to bring prices down.

The comment sections of our web set are designed for thoughtful, intelligent conversation and debate. We want to hear from the viewers but we are not obligated to post comments we feel inappropriate or violate our guidelines. Here are some of the criteria you should follow when posting comments:

Comments cannot be profane or vulgar. Children and families visit this site. We will delete comments that use profanity or cross the lines of good taste.

We will delete all comments using hate speech. Slurs, stereotypes and violent talk aren’t welcome on our web site.

Comments should not attack other readers personally.

We will delete comments we deem offensive, in bad taste, or out of bounds. We are not obligated to post comments that are rude or insensitive.

We do not edit user-submitted comments.

As a host WEAU 13 News welcomes a wide spectrum of opinions. However, we have a responsibility to all our readers to try to keep our comment section fair and decent. For that reason WEAU 13 News reserves the right to not post or to remove any comment.
powered by Disqus