Gas Price Breakdown

By  | 

Gas prices have been inching upward, and gas station surveys show over the past five weeks, the cost has gone up 15 cents a gallon. The national average is now at $2.30 a gallon.
But here in the Chippewa Valley we're paying $0.09 more than the national average, why? A local gas station manager givess his perspective.
Prices at the pump have been plump for a while... But the manager of River Country Co-op says, "by the time it gets to us we're paying premium dollar."

Jim Jones says drivers tend to point the fuel cost finger at them, but he says a few things make our prices higher: one being taxes.

"We have the highest state tax in the country," says Jones.

Jones also says the lack of a law requiring ethanol in gas here gives neighboring states like Minnesota and Iowa an advantage, and paying with plastic creates a price pinch.

"A lot of people don't realize we have to pay for the use of their credit cards," says Jones.

So where does the rest of this $2.39 charge come from? According to Jones, this is how last week's prices panned out:

Stations were charging $2.29 a gallon, but stations had to pay $2.31. Meaning, they lost money on gas. With a $0.32 Wisconsin tax, a 22 cent federal tax, plus a penny and a half for delivery. Then you're left with a $1.75 charged by the supplier per gallon. Jones says hardly any gas stations charge the legal requirement of a 6 % mark-up, and if they did, he says they'd lose it on the credit card fees.

Jones says, "that's why you don't see mom and pop stations no money in it. We work on inside sales."

So how do smaller stations sometimes charge less? Jones says it's all about timing, "if you bought fuel a month ago, haven't sold it all, bought it cheaper, you can afford to drop it a few cents."

But the 20 year gas biz veteran says he doesn't expect any big drops anymore. "I don't think we'll see $2 a gallon again," says Jones. He notes, there are days a gas profit can be made, but stations say they have to go with what the competition is charging, then they line that up with wholesale prices. Suppliers' prices change daily but gas stations can only change their prices once a day.
The Wisconsin Petroleum Council blames higher prices on the stock exchange.