Posted: 7/31/02

On gas prices, Hatch has it right

When Mike Hatch took on the gasoline industry in Minnesota last Thursday, the stateís attorney general said what many of us have suspected for a long time.

Although service stations and refiners in the state may not be breaking the law, there is profiteering and price-gouging that is going on every day. And it isnít right.

Most of us knew this in the aftermath of the September 11 attacks on America when the price of gasoline in many areas, including Forest Lake, soared with a round of panic buying. That was somewhat expected and did not come as a big surprise.

But for those of us who carefully follow the fluctuation of prices at the gas pump, it is clear the changes have no hard connection to the supply of gas.

In a report called ìMinnesotaís Gasoline Market,î Hatch stopped short of saying there was anything illegal about how the petroleum market works in Minnesota, but the attorney general was clear in calling the practices wrong.

Studies have shown that Minnesotaís gas prices are higher than the national average. A drive from south to north starting in Texas and ending in Minnesota will show you that the price in Texas is much less than we pay here. We can probably attribute our higher prices to the fact gasoline supplies are controlled by just a small number of suppliers.

With only a select number of firms controlling supply and price, it doesnít take a rocket scientist to figure out that we will probably pay more at the pumps.

Weíve seen a change in Forest Lake in recent years, too.

It wasnít too many years ago that Forest Lake was the place to buy low-priced gas. Go to most surrounding towns and the prices would be higher.

Such a trend no longer exists, however.

More often than not, when the price for unleaded gasoline at Forest Lake stations is $1.42 a gallon or a bit higher, the price will be $1.27 a gallon in towns like Cambridge.

Weíve even noticed that tourists areas like Brainerd will sell gas at prices that are much lower than Forest Lake.

Part of the frustration for the public in Forest Lake comes in the fact that we have little opportunity to talk directly to the owner of the gas station.

Years ago if we wanted to interview someone about gasoline, guys like the late Stu Houle would be there to provide a clear understanding of the situation. The days of owners like Houle for the most part have disappeared.

Todayís stations have a manager but they are someone who has to clear a comment from someone else who needs to check with someone else higher up the corporate ladder.

The one exception that comes to mind in Forest Lake is the Sinclair Station on US-61, which is privately leased and operated. Weíve seen little indication that this station has much latitude in the price it charges at the pumps.

The same probably holds for the corporate chains where we buy our gasoline.

Is it just the American way to take advantage of a situation to make a larger profit?

It is almost automatic that come the end of the week when more people are planning week end trips that the price of gasoline will jump. Such profit taking is attached to what is called higher demand. Weíve almost come to expect it, but have no evidence that it is tied to supply.

But when such price jumps come during a time of national emergency, such as last September, one really has to question the practice.

It is probably no coincidence that when governmental agencies start to get concerned that the price of gas quietly begins to slide downward. A little threat of an investigation seems to get their attention.

Perhaps the days of independence by retailers in towns like Forest Lake are gone. Therein lies the shame.

For those of us who would prefer to spend our dollars at home, a change is taking place, too. While we would prefer to spend locally, the thought of being gouged rankles many of us to the point where we do whatever we can to buy the cheapest gas.

If that means spending our dollars somewhere else, many of us are choosing to do so.

But the bottom line is the major retailers and the major oil companies donít care. They donít care when stations are situated on busy freeways where they know some folks will need gas, no matter what the price.

And they wonít care until such profiteering becomes a national issue and the government is forced to step in with regulatory actions.

We can only hope tigers like Mike Hatch continue to pursue the matter.

Top of Page