High gas prices not easily explained
RIFLE, Colorado ” Kirk Swallow might have to sell his gasoline supply business in Rifle, despite what many people at a Saturday meeting to discuss the area’s higher gas prices likely left thinking ” he makes more every time the prices go up.
Swallow gave a detailed presentation on the factors that influence the price at the pump at the stations his family’s business, Swallow Oil Co., either owns or supplies before a crowd of approximately 80 in the Colorado Mountain College West Garfield Campus auditorium in Rifle. State Sen. Al White, R-Hayden, hosted the meeting after he had received several complaints during last year’s election campaign about the higher prices.
Swallow said he would likely sell his business “When the point comes where it’s not profitable for us to continue.”
Swallow explained factors ranging from the price of a barrel of crude oil on the NYMEX exchange, rail transportation costs from Denver refineries to a Grand Junction terminal where his delivery trucks fill their tanks, high area real estate prices and wages all keep his company from making more than a 5-6 percent profit.
Then there are several “1,000-pound gorillas” in Grand Junction, such as City Market and Safeway, that can sell gas at below cost because their food sales more than make up the difference, Swallow said. Credit card companies that charge from two to four percent on every gas sale was another factor. Swallow said up to 80 percent of all gasoline sales are made on credit or debit cards.
However, Swallow’s presentation, plus comments from fellow gas supplier Al Butler of Western Petroleum in Glenwood Springs, didn’t seem to strike a chord with residents, who said several times that prices in Grand Junction were up to 30 to 50 cents a gallon less than Rifle. Silt and New Castle, along with the Bradley station in Glenwood Springs, were others cited as always having lower prices.
Rifle Mayor Pro Tem Alan Lambert somewhat angrily questioned Swallow’s explanation.
“I travel around most of Colorado and other than Vail, Aspen and maybe Glenwood Springs, Rifle and Parachute always have the highest prices,” he said. “They’re consistently higher here and I don’t understand why. High gas prices that everyone sees on your signs give the impression that everything else is costly, too and that isn’t the case. How much profit do you need and why do they always go up and down at exactly the same time?”
Lambert pointed out that when the Wal-Mart Supercenter opened on Airport Road seven years ago, it was to include a gas station similar to those at Grand Junction’s City Market or Safeway stores.
“That just seemed to disappear and no one ever said why,” Lambert said.
Butler said after the meeting that the Glenwood Springs Bradley station has always had lower prices because “Bradley has hundreds of stations and can use cost averaging to set his prices. We only have a few, so we have to set the price on what we need.”
Butler said Western Petroleum supplies gas to two Glenwood Springs stations and three in Grand Junction.
An assistant in the Colorado Attorney General’s office, Devin Laiho, attended the meeting and said if consumers suspect collusion among gas stations or suppliers, they should call the office at (303) 866-4500. If violations of anti-trust laws are found, civil or criminal prosecution are possible.
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