Merchants also feel squeeze at gas pump

At Zarco 66 on 23rd Street, the price of a gallon of unleaded gasoline Wednesday was $2.05.

It wasn’t the most expensive gas in town, but it was costly enough to get this reaction:

“I think it stinks,” said Chuck Ledom, 72, who had just filled up the tank on his white pickup truck.

Don’t blame the gas stations, though. Energy experts say it’s the oil suppliers — most of them outside the United States — who are pocketing the recent price increases.

“It’s pretty much all going to the bottom two sections of that bar graph — the refiners and the crude oil suppliers,” said Jake Bournazian, an economist with the federal Energy Information Agency. “The marketers’ margin hasn’t changed at all. They’re getting squeezed.”

The cost of gasoline has risen quickly. The Journal-World’s recent “Pump Patrol” columns have put the lowest price at $1.97 a gallon this week — up from $1.83 in late November, and way up from $1.62 in early March 2004.

Across the Midwest, the Energy Information Agency says, the average price is $2 a gallon — up more than 9 cents from a year ago.

At the Fuel Stop in East Lawrence, customers are grumbling.

“Obviously with the price going up, nobody likes that,” said Cody Lindenberger, the store manager. “But people have to have gas.”

Eric Johnson checks the total while filling up his Camaro with gasoline at the BP Amoco Shop at 31st and Iowa streets. Gas prices have climbed above per gallon at many locations Wednesday in Lawrence.

Little of the money goes to the gas station, however. According to Bournazian, the breakdown is this:

l 51 percent goes to the crude oil suppliers — two-thirds of whom are outside the United States. While Middle Eastern oil-producing nations get the most attention for their ability to influence prices, Bournazian said, the main suppliers of U.S. oil are Nigeria, Venezuela, Canada and Mexico.

“We rely on our closest sources of supply.”

l Nationwide, an average of 24 percent of the cost of a gallon goes to state and federal taxes. In Kansas, 24 cents a gallon goes to state coffers — only 11 states have higher gasoline taxes — with another 18 cents going to the feds. That’s 42 cents per gallon.

l Refineries get about 18 percent of the cut.

l Marketers and distributors — service stations, mostly — get the few pennies that are left, about 7 percent.

In March 2004, the distribution was different, with service stations getting about 11 percent of the cut, and refineries and oil producers taking less.

Service stations don’t raise their prices as fast as their suppliers, Bournazian said, because their competitors are often right across the street.

Price pressures mean “you’ve got to be selling your gasoline between $1.95 or $2.05, and you’re just making pennies,” Bournazian said.

That’s little comfort to Ledom, who said he figured prices would go back down if the federal government would let oil companies drill in an environmentally sensitive wildlife refuge in Alaska.

But the higher prices won’t keep him off the road.

“I don’t have much choice,” Ledom said. “I’m going to drive as much as I can. Sure it’s going to hurt a little bit — it’ll hurt anybody, particularly retired people and people with low incomes. It’s not going to be good.”