Archive for Wednesday, September 20, 2006

Pump prices fluctuating

Lawrence recently offering better deals than nearby cities

September 20, 2006

Advertisement

It was a happy mystery across Lawrence for a few days, but one that has almost disappeared overnight and may never be fully explained.

Gasoline prices here, usually higher than in surrounding cities, were actually lower in the past couple of weeks, with some pumps showing $2.10 and $2.13 per gallon of unleaded gasoline. But by end of the day Tuesday, most Lawrence stations had gone back up to $2.25, more in line with the prices in other Kansas towns.

That's still considerably lower than the $3-plus prices seen at station pumps earlier this summer.

"It's a lot better, but I'm still riding this," said Michael Hillix, of Lawrence, as he pumped gas into the tank of his 94 Honda Shadow motorcycle Tuesday afternoon at Food Mart store and gas station, 1733 Mass.

Hillix bought his motorcycle two years ago so he would have a cheaper option for transportation than his pickup truck. Because gas prices have been so volatile, he said, he has no plans to cut back on using the motorcycle.

No good answers

Before prices begin moving upward Tuesday afternoon, the average price of a gallon of regular unleaded in Lawrence was $2.15, according to Kansas AAA's fuel gauge Web site. That was 12 cents lower than the average price in Kansas City, Kan., or Overland Park.

Traditionally, Lawrence gasoline prices have been higher than those in the Kansas City area as well as other cities or communities. A year ago, according to the automobile association, the average price in Lawrence was $2.69 while in Kansas City it was $2.56.

Prices in nearby cities were slightly higher than Lawrence's latest $2.15 average. In Topeka, a gallon of unleaded gasoline was $2.19. Observers in Ottawa said a common price at stations was $2.19. In Wichita, the price was $2.18.

Why the difference in prices among cities? Though there are many factors that go into setting prices, representatives of the oil, gasoline and travel industries were hard-pressed to explain.

"I don't have any really good answers," said Tom Palace, executive director of the Kansas Petroleum Marketers and Convenience Store Assn. in Topeka.

Palace's best guess, however, centered on sales taxes. Kansas City stations have to compete with stations right across the border in Missouri, he noted. Missouri taxes are cheaper than Kansas. So Kansas filling stations close to Missouri must hold prices as low as possible to stay in the game with competitors across the state line.

"That doesn't necessarily mean they are going to be lower than Lawrence or other towns in the state, though," Palace said.

Palace also offered a simple explanation why Lawrence prices recently have been lower than Kansas City. Local stations have been trying to keep up with big chain stations, in particular QuikTrip, he said.

Robbi Reddy, owner of Fast Lane Conoco, 1414 W. Sixth St., said he had been selling at a loss of 7 cents a gallon as he tried to compete with the lower prices QuikTrip has been posting. But he and other stations relented and raised their prices to $2.25.

Lalith Lokanandi, manager at the Food Mart where Hillix was filling his motorcycle gas tank, agreed. Independent retail gas stores have a tough time making money on gas, he said.

Lower demand, lower prices

The nation is heading into a time of the year when gasoline prices typically drop, according to Kansas AAA spokesman Jim Hanni and Tim Carr, head of the energy and research section of the Kansas Geological Survey.

"Gasoline inventories are high, and the driving season is over," Carr said. "There's more gasoline chasing less demand, so prices have fallen."

The nation hasn't experienced a severe hurricane season like it did last year when the Gulf states were struck by Hurricanes Katrina and Rita. Damage from those hurricanes caused refineries to shut down and sent gasoline prices rocketing. The nation is just now gaining respite from those disasters, Hanni said.

"There was some built-in jitteriness over anticipated problems with refineries in the Gulf, and that just didn't happen," Hanni said.

The oil, gasoline, refinery and pipeline systems are operating at maximum capacity, so any blip can cause a problem, Carr said.

"In the supply system, there isn't a lot of slack," he said.

Events in foreign countries also affect the price of oil and gasoline, Carr and Hanni said.

"If Hezbollah and Israel start throwing missiles at each other again and Iran gets involved, it's those kinds of things could cause a problem," Carr said.

David Curtiss said he was resigned to dealing with high gas prices, even if they have dropped in recent weeks.

"I try to go where it's cheaper," the Lawrence man said as he filled the tank of his pickup truck at Fast Lane. "I don't want to walk."

Comments

terrapin2 8 years, 9 months ago

Earlier this evening we saw gas in Northwest KC on I-29 near the airport for $1.99/gal.

concernedparent 8 years, 9 months ago

i almost cried when I saw the 2.25 again...

concernedparent 8 years, 9 months ago

you're exactly right bozo. Thats what is happening here.

jhawkrawk 8 years, 9 months ago

Metro areas have different EPA regulations for their fuels. Lawrence is not required to include these smog control additives. So, in the summer, prices should be lower here. By the way, the front page was outdated at time of publication. If you want up-to-date gas prices go to www.kansasgasprices.com.

cutny 8 years, 9 months ago

The price goes up, the price goes down...this is news to people? Breathtaking

as_I_live_and_breathe 8 years, 9 months ago

Posted by tony88 (anonymous) on September 20, 2006 at 1:36 p.m. (Suggest removal)

"Why do we have these high taxes if the city can't do something with them?"

They do do something with them. They build all the infrastructure for the upper class and upper middle class


? You don't let poor people use the infrastruction in Larryville? How do you keep them out of it?

Kelly Powell 8 years, 9 months ago

They will make up for lost profit when they stick it to us on the natural gas price this winter.

Confrontation 8 years, 9 months ago

tony88: Why do we have these high taxes if the city can't do something with them? I wouldn't mind the high taxes if they somehow helped all the citizens, rather than just crappy artists who sale junk to the city.

dizzy_from_your_spin 8 years, 9 months ago

Sebelius' next campaign ad: a smiling govenor pumping lower gas prices to carloads of happy Kansans, all due to her intervention and initiatives.

Why not? A lot people must be buying the other gas (flatulence) her campaign has been trying to sell.

just_another_bozo_on_this_bus 8 years, 9 months ago

"With gas prices falling, we should all thank President Bush."

That's exactly his intent, and he expects you to do so by voting Republican in November-- after which we'll see prices go back up again.

regularjohn 8 years, 9 months ago

"With gas prices falling, we should all thank President Bush. Since we all blamed him for the rising prices, we must give him credit for the falling prices as well."

Thank him for what? Being conditioned to accept $2.13 a gallon now as a bargan for a gallon of gasoline as opposed to $3 this summer?

Thanks, W.

lunacydetector 8 years, 9 months ago

in kansas city, regular unleaded was selling for $1.97 per gallon a week ago.

EXks 8 years, 9 months ago

Hey, just think how much LOWER those fuel prices will be IF George W. finally gets his Iraqi gas station up and running, this after how many thousands have paid the ultimate price?

IF that happens you all can drive with a smile on your face knowing that Mission Accomplished actually means something.

davisnin 8 years, 9 months ago

'George Bush lied' explains the solar flare cycle. 'People getting fed up' explains the difference between cities.

grubesteak 8 years, 9 months ago

You can't compare Lawrence gas prices to Kansas City gas prices, since the gas tax in Kansas is nearly 10 cents more than Missouri.

Sucks.

Raider 8 years, 9 months ago

This is pretty funny. There is a Quick Trip right across from my office on Shawnee Mission Parkway in OP. When the Lawrence QT was running at $2.13 all last week, the QT in OP was at $2.25 - 2.35. Today, QT in Lawrence went back up to $2.23 and the QT across from my office dropped down to $2.10. It's amazing!

badger 8 years, 9 months ago

I have a guess, and that guess is NOAA.

Earlier this year, NOAA released its hurricane predictions for the year, which have been historically reasonably accurate. They predicted that it wouldn't be as bad as last year, but that it'd still be higher than average number of storms and amount of damage. I imagine a lot of oil futures were purchased with this in mind.

Once the season had started, NOAA revised its estimate downwards. At about the halfway point, when the worst storms have usually already hit, we've had almost no hurricanes make landfall, and several just hang out ineffectually in the Atlantic. We're only to Helene.

Since so much of our production and refining facilities are in the Gulf, hurricane season can have a big impact on gas prices, and I bet the fluctuations have something to do with futures prices dropping and some minor price wars going on.

Well, that and election year politicking. But even election year shenanigans wouldn't bring this on if the companies weren't making a profit doing it.

davisnin 8 years, 9 months ago

A gas station owner told me that George W called him up on the phone and told him to lower the gas price until after the elections so the republicans would win.

Confrontation 8 years, 9 months ago

I have to agree with you on that one. Sad.

Confrontation 8 years, 9 months ago

Why wouldn't the Lawrence gas stations charge more for gas? This town charges more for everything. What do you get for these high prices? Crappy roads, very few recreational opportunities, a large part of the population who think they are special because they pay high prices, homeless haven, overpriced junk art purchased with your tax dollars, overpriced downtown stores, horrible taxes, high rent for even slum apartments, and mental health patients walking the streets as if they were in Topeka. Seriously, is there anything worthwhile in this town, other than KU Men's Basketball? Go ahead and comment on the "fabulous" schools. Teaching kids in trailers and giving teachers the lowest pay always equals a "fabulous" education.

Commenting has been disabled for this item.