If you thought gasoline prices smelled fishy in Palm Coast, blow your nose, take an antihistamine, and prepare for lower pump prices.
February 7, 2001, will be our day of destiny. Albertsons is coming to town and bringing its own gasoline station. Every indication points to significantly lower prices than Palm Coasters have seen for years.
This newspaper has run numerous articles and letters bemoaning local gasoline prices, but our friendly gas station owners have remained largely unresponsive to our concerns.
Everyone in town who cares about how much she pays for gas knows that Palm Coast prices run about 10% higher than in nearby Volusia County, which even levies an additional five cent per gallon county tax. In fact, as of Friday, November 17, there was a 21-cent per gallon difference between the price of gas at the Hess station (Exit 92, off I-95) and the most pricey octane outlet on Palm Coast Parkway.
Existing state law requires that gas station owners may not set prices lower than at least 6.7 per gallon cents above cost. There is an exception, however. If one station, in charging 6.7 cents above cost, has prices higher than a nearby competitor who purchased its gas cheaper from another distributor, it can match the competitor’s lower prices, even if doing so causes it to set a price less than cost plus 6.7.
I’ve never seen that scenario — a gas war! — in Palm Coast in the two years I’ve resided here. What I’ve seen, which the multitudes have observed and complained about on these pages, is the reverse: a seemingly cartel-like, price-fixing situation where (higher) prices are preserved, not competed.
But the end is near. Competition is coming. Not only will Albertsons be pumping gas next February, Racetrac gas is coming to town, too. We’ll see how fast things change — for the better.
There are some givens in setting gasoline prices. First, all Florida stations must include the same federal (18.4 cents) and state (13.3 cents) tax surcharge per gallon. Counties can add their own taxes. Flagler adds 7 cents, while Volusia adds 12, and Duval and St. Johns both add 6 cents per gallon. Thus, the total Flagler freight is 38.7 cents versus 43.7 for Volusia and 37.7 for Duval and St. Johns.
Lastly, you got the 6.7 add-on, which I guess was made into law to ensure some degree of financial security (profit) for all gas stations. [This paper recently ran an article that some folks, including Flagerites, are trying to repeal the law.]
As you can imagine, I’ve had considerable trouble discerning the wholesale price of gas (plus taxes). For some reason, station owners and operators don’t care to share those details with us. However, my reliable source, who says that gas prices change daily (except Saturdays) and vary by location throughout the state, says that the current price level varies between $1.39 and $1.55. Add your seven cents and you get a “competitive” pricing range of $1.46 to $1.62 throughout the state.
Judging from the price of gasoline off Exit 92 and in Daytona, I’d say we live in an area in Florida which tends to be near the lower price range. Of course, that tendency doesn’t seem to exist in Palm Coast as we don’t have competitive gas pricing. Not yet.
I can’t wait until February.
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Fred W. Apelquist, III, M.Ed.
Approximately 560 words.
© 2000