Explanations for gasoline price discrepancies vary

Nathan Anderson didn’t look up as he drove in to fill up his gasoline tank Monday afternoon at EZ-Al’s Food Mart, 955 E. 23rd St.

He paid $2.85 a gallon.

But with the tank almost full, Anderson discovered unleaded gasoline 18 cents cheaper across the street at QuikTrip, 1020 E. 23rd St.

“What am I doing over here? I didn’t know it was that much cheaper,” he said.

Other fuel stations on 23rd Street had prices comparable or equal to QuikTrip’s. Anderson usually finds the price at the two stations within a couple of cents, and he didn’t want to cross the busy intersection.

Still, since gasoline prices jumped and hovered near $3 a gallon, more drivers have let cost trump convenience.

“For the most part, the gas prices are what they are,” said Tom Palace, executive director of the Kansas Petroleum Marketers and Convenience Stores Assn. “If somebody wants to go low somewhere, they will go low, and everybody else is going to follow them just so long as they don’t lose their share of the market.”

This weekend and Monday, Lawrence drivers encountered price variances of 18 to 22 cents, even if stations were across the street from each other or a couple of blocks away.

“It’s a gas war, and I’m not getting in the middle of it,” said Ali Ezzeddine, owner of EZ-Al’s Food Mart.

Traffic on East 23rd Street passes between two gas stations with a large variance in their gasoline prices. A spokesman with AAA in Kansas said pricing often depends on the company's cost structure, including how much it pays for gasoline and employee wages.

He criticized the low prices at QuikTrip across the street and said that he tried to lower his prices for a period of time to compete but incurred too many losses.

A QuikTrip spokesman said the company does not respond to questions regarding the price of gasoline or other store operations.

“Because we have no way of knowing the strategies of our competitors, we have no way of anticipating or understanding the reasoning behind their pricing activities. For us to comment on any competitor’s price would be pure speculation,” said Mike Thornbrugh, QuikTrip’s manager for public and governmental affairs, in a written statement.

Jim Hanni, executive vice president for AAA in Kansas, said stations set their prices based on their different cost structures, like how much they pay employees or the cost to operate the station. The timing of when they bought their gasoline from their distributor and its price could also be a factor.

On Monday, the average price in Lawrence for one gallon of regular unleaded gasoline was $2.78 – down from Sunday’s $2.82, according to AAA. One month ago, the average price was $2.90, and one year ago, it was $2.60.

Lalith Lokanandi, manager at the Shell store, 1711 Mass., said he was surprised Monday morning to see his store’s price 22 cents higher than the Kwik Shop, 1846 Mass. Lokanandi said his store has to pay rent, and it is trying to recover from a rough summer with construction in front of the store. They are charging what they pay for their supply, he said.

“It’s pretty tough. We are worried about the business,” he said.

A spokeswoman for Kwik Shop in its Hutchinson office declined to comment.

Chris Coonts, a Kansas University senior, filled up his pickup truck with super-unleaded gasoline Monday morning at the Kwik Shop. Coonts used to buy gas from the most convenient place.

“Now I usually look for the lowest,” he said.