KINGMAN - Gasoline prices have been on the rise in Arizona during the past five weeks, jumping about 12 percent across the state, including here in Kingman.
The local price for a gallon of regular unleaded averaged $2.163 Wednesday morning, according to prices compiled from 22 local stations by AAA's Fuel Price Finder, www.aaa.com/fuelfinder. That price remains about 15 cents higher than the statewide average of $2.026, as is typical for northern Arizona, which receives most of its gas via truck from Phoenix and Tucson.
Gas prices for Kingman's nearest neighbors - Bullhead City, Flagstaff and Lake Havasu City - averaged $2.15, $2.252 and $2.187 per gallon, respectively.
Arizona's gas price average remains well above the current national average of $1.891 per gallon.
In fact, the state's gas prices now rank among the most expensive in the continental U.S., with only the west coast, Nevada and New York averaging higher.
According to AAA spokeswoman Michele Donati, that distinction is somewhat of a return to normal for Arizona, which she said has historically placed in the upper-half of gas prices nationally. The situation is compounded by the fact that Arizona has no oil refineries of its own and must rely on a pair of pipelines flowing into the southern part of the state from California and Texas.
But even so, Donati noted that oil has been trading stably in the mid to upper $30 range for weeks, and demand for gasoline has been dropping for 13 consecutive months nationwide. Normally, she said, these factors would lead to the price of gasoline dropping considerably, as it did in the latter half of last year, when prices fell from more than $4 a gallon in July to well below $2 by December.
Donati blamed two culprits for keeping Arizona's prices inflated. The first, she said, were California oil refineries making a conscious decision to sell less gas to Arizona in hopes of making more money from California's sky-high gas prices - the highest in the nation at $2.265 per gallon. Donati also claimed that refineries had previously tightened Arizona's access to gas in order to close the gap between supply and demand in the state, thereby preventing gas prices from sinking even lower than they did in late 2008.
Donati said this move caused an unforeseen price jump in January after one of the state's biggest gas distributors, Flying J, filed for Chapter 11 bankruptcy.
"Flying J was a major supplier of fuel to the state, and that caused gasoline inventories across the state to tighten," Donati said.
"The west line really had to step in and balance out the (supply shortage), because previously the east line was supplying about 80 percent of the fuel."
Donati said the other factor influencing Arizona's gas prices is the simple difficulty local retailers have making a profit off it.
A new report released Feb. 19 by the Oil Price Information Service found that Arizona ranks dead last among the continental U.S. in terms of gasoline profit margins, with retailers losing on average 17.4 cents for every gallon of gas sold. The report found that while retailers are still charging about 18 cents higher than wholesale for a gallon of gas, they are losing 36 cents to state, federal and local taxes, as well as shipping costs.
Four Arizona cities made the report's list of the top ten least profitable metro areas in which to sell gasoline, with Phoenix-Mesa and Tucson topping the list at negative profit margins of 24.4 and 20.6 cents a gallon respectively.
Yuma and Flagstaff also made the list, with losses of 5.6 and 1.5 cents per gallon.
"People get angry at the gas station, but they don't realize that the station itself is making the least profit in terms of selling gasoline," Donati said. "A lot of gas stations actually make very little on gasoline, but they use it as a loss-leader."
Donati said many stations will drop their gas prices as low as they can to get customers to come into the store, where they make up the difference by buying snacks and other sundries. But with the nation undergoing a recession and consumers much more careful with their dwindling discretionary income, such stations are feeling the pinch like never before.
"If you look at an independent station right now that only sells gas and doesn't sell a lot of things inside their store ... those stations will be selling their fuel for a lot more money," Donati said. "They have to raise their price at the pump even more so than stations that sell those convenience items."
So long as retailers continue to struggle to make ends meet, Donati believed it was unlikely local prices would drop back to December levels anytime soon.
"Given what retail profit margins are, it's unlikely, but we're going to continue to monitor it," she said.
"They're pretty much doing all they can to recoup their costs right now."
Reader Comments
Posted: Tuesday, March 03, 2009
Article comment by:
What's really Bad ? Our Elected State Officals could care Less !
Article comment by: lee
KINGMAN: YOU ARE GETTING HOSED FOR THE PRICE OF GAS..IN MISSOURI IT'S ONLY $1.59 A GAL...
No one in public office seems to care ... Price fixing is alive and well in Arizona...
Posted: Sunday, March 01, 2009
Article comment by:
Rock
Funny how gas prices dropped by 10 cents the afternoon after this story came out at nearly every station that was charging about $2.18-2.22 a gallon now it's suddenly 2.05-2.07. And on a bloody Friday no less! Ironic? Usually it goes up on weekends to catch the vegas traffic. Bs!!!!
Posted: Saturday, February 28, 2009
Article comment by:
No name provided
I live in TN now, but lived in Kingman for years. Our gas is at 1.71. The highest it has been in the last few weeks was 1.81 and then right back down to 1.69. You guys seem to be stuck in a situation were there is nothing but GREED. Good luck with that
Posted: Saturday, February 28, 2009
Article comment by:
BOB
Hey, You would not print my last comment, so you probably won't print this either. Kingman has always been known as the highest priced gas on Route 66.. for the Last 60 years. Why don't you find out why ???
Posted: Saturday, February 28, 2009
Article comment by:
No name provided
i believe that if we have states all around us can sell gas 40 to 50 cents cheaper all around us arizona can to.namely kingman if the gas stations werent making any money they would be closing down.I feel what we have here is a good old case of price gouging which is against the law.Its not nessary for Exxon or chevron or all the rest to make 45 to150 billion dollars every year especialey since September 1 about 4 million people have lost thier jobs it shows you where thier heart is at.
Posted: Friday, February 27, 2009
Article comment by:
melanie
I lived in Kingman for over 10 years. I moved to Idaho and our prices now are 1.67 gal. (They just went up some). Just thought I would share.
Posted: Friday, February 27, 2009
Article comment by:
No name provided
Two words...organized crime.
Posted: Friday, February 27, 2009
Article comment by:
bb
I do not care what excuses you or the crooks in washington call our economy, it is GREED by corporate america. We are not stupid, so stop treating us as if we are.
Posted: Thursday, February 26, 2009
Article comment by:
nick
I just got back from Northern Idaho and gas was a 1.59 to 1.79 a gallon.
Posted: Thursday, February 26, 2009
Article comment by:
PRS
So many people got used to NOT going so much when the gas was near $4 a gal that they are continuing this practice. Possibly also, more have lost or taken big cuts at their jobs. Who can affort to buy gas when you can not pay your bills ? ! Sorta catch 22 situation that many of us are in, with no light at the end of the tunnel.
Posted: Thursday, February 26, 2009
Article comment by:
Geroge
I'm in Ohio presently visiting family. Gas $1.79. Not looking forward returning to Kingman for gas. Guess I'll fill up in Vegas upon flying back (since we don't have air service either).
Posted: Thursday, February 26, 2009
Article comment by:
Clark Isaacs
Gas prices are so high because of GREED! Get that plain and simple, no matter what you call the excuses, greed fuels the economy. Big oil make 150 billion last year and says oh well they don't care about a little porky in their tank!. Bah, Humbug!
Posted: Thursday, February 26, 2009
Article comment by:
John Shell
I'm sorry but this sounds like B. S. I know you can't print this, but it is the way I feel. They are all a bunch of greedheads. If you thought businesses here were making huge profits off of gas, you’d be wrong... Don't make me laugh, they are making money or they wouldn't be selling it.
John
Posted: Thursday, February 26, 2009
Article comment by:
No name provided
Was just outside Phoenix on the 110 towards California $1.83 a gal 40 miles outside town. Here anywhere from 2.07 to 2.17 within blocks of each other. So because not everyone buys their snacks (which cost at least 20% more than other retailers) Everyone has to pay higher gas prices. Oh for the days of "service stations" that sold gas and took care of your car instead of convence stores that sell gas.
Posted: Thursday, February 26, 2009
Article comment by:
Web Admin
@ No name (Was there an end...)
"Was there an end to this sentence?"
Not with the typo. Should read, "They have to raise their price at the pump even more so THAN stations that sell those convenience items." Use of the word 'so' doesn't help matters.
Anyway, it's fixed.
Posted: Thursday, February 26, 2009
Article comment by:
lee
KINGMAN: YOU ARE GETTING HOSED FOR THE PRICE OF GAS..IN MISSOURI IT'S ONLY $1.59 A GAL...
Posted: Thursday, February 26, 2009
Article comment by:
No name provided
"They have to raise their price at the pump even more so that stations that sell those convenience items."
Was there an end to this sentence?
Posted: Thursday, February 26, 2009
Article comment by:
No name provided
"A new report released Feb. 19 by the Oil Price Information Service"
Oh sure, that's exactly who I'd go to for unbiased information on oil prices!
Posted: Thursday, February 26, 2009
Article comment by:
No name provided
