Why does filling up your car in Cache Valley cost so
By KC Muir
October 16, 2006 | LOGAN - From an outsider's perspective,
most people around Cache Valley probably look a lot
alike. Nonetheless, we all are different in our thinking
and the way we view the world. It seems as though, however,
that gas prices are driving us all crazy.
How is it that we have some of the lowest wages in
the country and the some of the highest gas prices?
"Gas prices are way too high here considering that
the state has oil production facilities and the natural
recourses available to produce our own oil," said one
local man. "I heard that the problem was that the local
retailers have lost money over the last year so they
are trying to make up for it now while they can."
So how bad is this problem? Try 33 cents a gallon
bad. As of Oct. 10, the average price for regular unleaded
gasoline in the U.S. was $2.26 cents a gallon. Here
in Cache Valley it is $2.59. So let's say that you drive
your typical compact car that has a 15-gallon tank and
you fill up your car every other week. By paying that
extra 33 cents, you are spending about $5 more then
the rest of the country every time you fill up. That
may not seem so bad, but when you add it up, we are
talking about $120 a year. Ouch.
"It's making it harder to get by," said one local
woman. So is it just bad in Cache Valley? The average
gas price in Utah is $2.57 a gallon with the lowest
being $2.32. Here in the valley, we average $2.59 with
the lowest being $2.49 a gallon. Did you know that in
some places in the country they are paying $1.90 a gallon?
I don't remember paying that little since I was 16 (seven
years ago). To see the current lowest gas prices in
the state click
"I heard that if you slow down and drive the speed
limit, then you'll get better gas mileage. I've tried
that and when that didn't work I went and bought one
of those Flying J membership cards so that I can get
an extra cent off," said a friend of mine. He is actually
on to something. Right now, Flying J is the cheapest
place in the valley to fill up. At $2.49 a gallon, it
is 16 cents cheaper then half a dozen other places around
town that charge $2.65 a gallon.
Flying J's biggest competitors on price are Maverik
and Sam's Club. According to the business manager at
Sam's Club, their gas is sold at a wholesale price or
sometimes a little more depending on what the other
local stations are charging. They call this process
"comp shopping" to insure they have the lowest prices
on gas and other items locally.
Sam's Club is unique in that they can afford to sell
their gas almost as cheap as they want to because most
of their profit is generated by membership fees. In
fact, they often use their low gas prices as a marketing
tool to get people to purchase a membership. At the
moment it costs $35 to become a member and have access
to their gas pumps. I cannot imagine that it would be
necessary to purchase a $35 membership if all you use
it for is gas, but to each his own.
Maverik and Flying J are often competitive and sometimes
lower than Sam's and there is no membership required
to fill up, but both offer an incentive of 1-3 cents
off each gallon if you sign up for a free membership
card. This is by far is the best deal in town and one
that has saved me a little bit of pocket change.
Although I don't have specific numbers as too which
station in the valley does the most business or makes
the most money, I have noticed that both Maverik and
Flying J are constantly busy and sometimes can be a
hassle to fight the lines and idiot drivers (a story
for another time). In fact, all of the people that I
have asked, normally do fill up at Maverik or Flying
J. Both stations also use their low gas prices as a
marketing tool to get people to patronize their businesses
and generate revenue through the sale of goods and merchandise.
This stabilizes their profit margin, thus allowing them
to sell gas a bit cheaper. Other stations around the
valley; however, do not take this approach.
Chevron, who can be found at six different locations
around Cache Valley, tend to always be the most expensive
place to fill up. Why? Being the second largest gas
station chain in America (next to Shell, which is uncommon
in the valley), they attract business through location,
convenience, advertising, and other amenities like car
washes and fast food outlets. Basically, they don't
worry about competing price wise with other stations,
because they already have a large customer base.
Then you have you middle of the pack stations like
Phillips 66, Tesoro, and Sinclair that are semi-competitive
price wise and seem to just kind of steadily exist.
Anyway you look at it, they are all still more expensive
here then almost anywhere else.
On Oct.13, there appeared an article on the Deseret
Morning News website written by Dave Anderson that
claims a state commission headed by Governor Huntsman,
found that local gasoline retailers are in fact ripping
off consumers. According to the article, "The profit
margin for gasoline is small, often only a few cents
per gallon. It appears, however, that during recent
weeks some retailers have been making a profit margin
several times greater than average."
It goes on to say, "About 30 percent of Utah's crude
oil comes from Canada, 15 percent from within the state
and the rest from Colorado, Montana and Wyoming." So
it is true that we are getting screwed! Nevertheless,
it is encouraging that the state government is at least
monitoring the situation. Hopefully they will step in
and stop this nonsense.
For now, your best bet is to jump on a bicycle.