“We do find in a number of markets where there are dominant retailers, they will increase prices significantly and other competitors will follow,” said Gregg Laskoski, senior petroleum analyst at GasBuddy, which tracks gas prices in the U.S. and Canada.
Speedway operates numerous stations in the Springfield and Dayton area, and is among the largest gas retailers in the region with 1,371 stations in seven states.
The company sold about $2.9 billion of gasoline last year, according to parent company Marathon Petroleum in filings with the U.S. Securities and Exchange Commission.
With gas prices pushing $4 a gallon and expected to rise through summer, all eyes are on Speedway.
Gas prices peaked in Springfield at $3.99 a gallon Wednesday, and nationally gas prices are higher than $3.80.
The average price in 2011 was $3.57, the highest since before the recession, according to the U.S. Energy Information Administration.
And as gas prices rise, demand in the U.S. plummets. According to a AAA fuel gauge report released in March, demand is the lowest since March 2001.
On Facebook, Springfield resident K Dale Frazier said he feels like he is “imprisoned” because of high gas prices.
“I don’t go out nearly as much,” he said, adding he went “from going to stores three to four times a week to going out once, maybe twice. ... I used to like drives around the countryside; but no more.”
Others on Facebook also said they combine all their trips into one, and even have their kids walking to school.
Speedway does not dictate local gas prices, but the company “will be a factor for the other guy down the street,” said Ray Keyton, president and chief executive of AAA Miami Valley.
Speedway’s response
Speedway did not allow the Springfield News-Sun to interview employees, managers or company officials for this story. But spokesperson Shane Pochard said Speedway analyzes all the markets in which it does business and prices its products accordingly.
“Our goal is to provide consumers with best possible fuel at (the) best possible price,” Pochard said. “Whatever independent marketers do to decide, I can’t say.”
Aziz Fkhar, manager of Mini Mart and Fuel America at 961 Selma Road, said he uses Speedway and suggestions by his gas supplier to decide how much he will charge for gas.
“We try to match (Speedway) because the they are the largest and they try to be the lowest,” Fkhar said. “If we can match them, we can take some customers, too.”
R&R Gas, the company that supplies Mini Mart, sends price suggestions daily. And because Fkhar must watch two different companies and take into account factors such as weather, gas prices can sometimes change three times a day, he said.
Gas retailers have to contend with a large number of factors in determining gas prices. According to the EIA, the price of crude oil made up 68 percent of gas prices in 2010. Taxes made up 15 percent, distribution and marketing 10 percent, and oil refining 7 percent.
“The largest (factor) is the price of oil, but look in the last three months, six months, the price of oil has been extremely volatile,” said Pochard of Speedway.
Reason for increase
Laskoski, the analyst for GasBuddy, said it’s much more complicated than supply and demand and crude oil prices.
He said that since the U.S. is a major exporter of gasoline to other countries, less of our supply goes to U.S. consumers. Foreign demand drives up prices.
“For the first time, we were a net exporter of gas last year. That contributes to higher prices here,” Laskoski said. “You’re diminishing your supply.”
And according to the EIA, U.S. crude oil imports are the lowest since 1999.
A report by AAA says positive economic news domestically and internationally has pushed oil prices higher.
“The successful reclassification of Greek debt ... combined with positive U.S. job numbers, erased the early week losses and propelled crude (oil) back toward its high for the year,” according to the report.
Not only are gas prices affected by news, it can be affected by speculators on Wall Street, who Laskoski said can influence and manipulate the price of oil.
Speculation is “often by people who have no intention of purchasing crude oil,” Laskoski said. “They make money simply on the transaction and make money when speculators push prices higher.”
Political issue
Speculation was a major campaign issue in the 2008 election, and Laskoski said he expects it to be again this year.
In Ohio, summer gas is more expensive because retailers must sell a “summer blend” that costs more than the gas sold in winter, Keyton said.
Laskoski agreed.
“This is why we always see (gas prices) go up this time of year, regardless of what crude oil is,” Laskoski said. “Because of government mandates for the summer blend.”
Still, gas is less expensive in the Midwest than in coastal states.
But gas prices are still rising, and the cost may be too much for some consumers to bear. According to a AAA fuel gauge report released in March, demand for gas is about 11 percent lower than a year ago, the lowest figure since March 2001.
Analysts say gas prices may not decrease again until winter returns, when the gasoline blends are cheaper. Laskoski said gas prices are cheapest from October through December.
Contact this reporter at (937) 328-0371 or emason@coxohio.com.
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