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Drivers cope with rising fuel costs

Posted: Tuesday, April 27, 2004

Prices for gasoline and diesel fuel have been climbing steadily, but apparently not enough to upset motorists or send them off looking for cheaper prices on the Kenai Peninsula.

"Business has been pretty constant," said Ron Delaney, store director of Fred Meyer in Soldotna, where gas prices are among the lowest in the area. He has not seen an increase in business.

Jesus de la Cruz, who leases the Tesoro gas station known as Cook's Corner in Sterling another spot for cheaper gas also said business has remained about the same.

When asked if any customers are remonstrating against the rising prices by speaking out or kicking things, Anna Barnes, a clerk at Cook's Corner said, "Not yet."

De la Cruz said he received a four-cent-a-gallon price hike from his supplier Thursday, but had not yet raised his pump prices.

Delaney said the Fred Meyer corporate headquarters in-formed him of a nine-cent-a-gallon wholesale price hike coming this week.

While Delaney said the objective is not necessarily to have the lowest gas prices in the area, Fred Meyer prices are low in hopes of drawing customers into the department store.

"It's that whole one-stop shop idea," he said.

Delaney said that although corporate officials are involved in setting fuel prices at the Fred Meyer outlet, local management looks at gas prices in the neighboring community before posting any changes.

"We don't want to be 10 or 15 cents over, but not necessarily the lowest either," he said.

"Our biggest loss leader tends to be groceries," Delaney said, of the store's pricing strategy that draws customers into the store.

"Then we try to get people to buy their fuel while they're here."

The price of premium at the Sterling Big John's Tesoro station Monday was the area's lowest at $2.07. Regular was selling for $1.98 and diesel for $1.78. At Cook's Corner, prices were the same except for premium, which was one cent higher. Neither station offers a middle grade of unleaded gasoline.

At the Fred Meyer store, premium was selling for $2.13 Monday; the middle grade of unleaded gas was $2.04; regular was $1.94; and diesel was $1.76. The nearby Williams Express was selling its product for the same prices, except for premium, which was a cent higher.

In Kenai, the lowest prices Monday were at the Williams Express on the Kenai Spur Highway at Bridge Access Road. Premium was $2.14, middle grade was $2.04, regular was $1.94, and diesel was $1.82.

The little Tesoro pumper station near the Kenai Airport only offers unleaded regular and diesel fuel, which were $1.91 and $1.76 respectively.

At the Tesoro station just a hop, skip and a jump away from the company's refinery in North Kenai, premium was selling for $2.18 Friday; middle grade gasoline was $2.08; regular was $1.98; and diesel was $1.82.

Nearly all the gasoline sold on the Kenai Peninsula is made at the North Kenai refinery, according to Bill Popp, oil and gas liaison for the Kenai Peninsula Borough.

Tesoro company officials attributed high costs of gasoline on the peninsula to sales tax, which is absent in Anchorage.

In Anchorage, gasoline prices were averaging $1.98 for premium, $1.87 for middle grade and $1.77 for regular, roughly 20 cents a gallon cheaper than on the peninsula.

Prices on the peninsula, however, include a 2 percent Kenai Peninsula Borough sales tax, and an additional 3 percent sales tax in Kenai, Seward and Soldotna.

The city of Homer adds a 3.5 percent sales tax and Seldovia has a seasonal sales tax of 2 percent from October through March and 4.5 percent from April to September.

Tesoro spokesperson Tara Payne attributed the recent rise in gasoline prices to higher prices refiners currently are paying for crude oil.

Other taxes on gasoline throughout Alaska include a state tax of 8 cents a gallon and a federal excise tax of 24.4 cents, according to Fred Hammon, owner of the Soldotna "Y" Chevron station, where gasoline prices are the area's highest.

"I can't compete against the multimillion-dollar giants," Hammon said of the large companies such as Tesoro, Williams and Fred Meyer that are selling motor fuels on the peninsula.

"They're on the verge of getting sued for predatory pricing," he said. "They're selling diesel for $1.76 and my cost is $1.80." Hammon's price for diesel on Monday was $1.99.

"I wish I could sell it for a dime," he said.

Hammon's gasoline prices Monday were $2.25 for premium, $2.15 for middle grade and $2.05 for regular.

The North Kenai Tesoro prices were comparable to those in Kenai at the Tesoro and Petro Express stations. The Kenai Tesoro does not offer a middle grade fuel.

In Homer, fuel prices at the Petro Express were $2.17 for premium, $2.09 for middle grade, $2.00 for regular and $1.88 for diesel.

The Quicky Mart in Homer, which only sells one grade of gasoline and diesel fuel had prices of $1.96 for its gasoline and $1.80 for diesel.

Station Premium Mid-Grade Regular Diesel

Kenai Airport Tesoro None None $1.91 $1.76

Big John's Tesoro 2.07 None 1.98 1.78

Cook's Corner Tesoro 2.08 None 1.98 1.78

Fred Meyer 2.13 2.04 1.94 1.76

Soldotna Williams 2.14 2.04 1.94 1.79

Kenai Williams 2.14 2.04 1.94 1.82

Soldotna Tesoro 2.18 2.08 1.98 1.87

Kenai Tesoro 2.18 None 1.98 1.87

Kenai Petro Exp 2.18 2.08 1.98 1.87

No. Kenai Tesoro 2.18 2.08 1.98 1.87

Soldotna Chevron 2.25 2.15 2.05 1.99

Homer Petro Exp 2.17 2.09 2.00 1.88

Homer Quicky Mart None None 1.96 1.80



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