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August 26, 2000
Salisbury Post; Rowan County, NC

Local News

Gas prices in Salisbury higher than some other surrounding areas

BY SARA PITZER
SALISBURY POST

           


David Hand was mad enough to call the newspaper two weeks ago.

Hand, a Food Lion trucker, had been driving I-40 from Winston-Salem through Statesville to Hickory. Everywhere he went he said he saw gasoline prices lower than those around Salisbury. The biggest difference he noticed was in prices at Wilco Plazas, as much as 10 cents a gallon, he said.

Price checks Wednesday revealed differences a little smaller but still notable. The price of regular gasoline at Wilco on Jake Alexander Boulevard stood at $1.43. At the Wilco Travel Plaza in Conover, just off I-40, regular gasoline sold for $1.37 — a difference of 6 cents.

The price was also $1.37 outside of Winston-Salem, at the Wilco on Silas Creek Parkway, but in Greensboro at a Wilco Plaza that sells Exxon gasoline, it was $1.41.

Don Long, general manager at Wilco Travel Plaza on Peeler Road in Salisbury, said individual locations have no control over the prices.

“That is done from the home office,” he said. “Individual stations survey competition in the area three or four times a week, and they set the pricing at the corporate level.”

Employees at the corporate headquarters of A.T. Williams Co., which owns the Wilco stations, referred all pricing questions to Steve Williams.

Williams said Wilco officials do not discuss their pricing practices and that that information was held “closely confidential.”

Prices varied from region to region — not just at Wilco, but at all stations — and in almost every comparison, the prices were highest in Salisbury.

BP stations:

  • In Salisbury on Statesville Boulevard — $1.44.
  • On U.S. 70 in Statesville — $1.37.
  • Off off I-77 in Statesville — $1.36.
  • Off I-40 outside Winston-Salem — $1.37.
  • Off I-85 in Thomasville — $1.35.

Texaco stations:

  • On U.S. 70 in Cleveland — $1.44.
  • On Business 321 in Lincolnton — $1.39.

Shell stations:

Only Shell stations seem to break the pattern.

  • On East Innes Street in Salisbury — $1.41.
  • On Lenoir Rhyne Boulevard in Hickory — $1.39.
  • Off I-40 outside Winston-Salem — $1.41.

Mary K. Byerly was filling up her 1985 Buick LeSabre at $1.41- a-gallon in the Shell station just off I-85 on East Innes Street. It cost her $20.

“I want to know why the folks in Salisbury are so greedy,” she said.

But she doesn’t plan to start driving a smaller car. “I love my car. Daddy took care of this car, and he left it to me. I will drive this car until it dies.”

Byerly asked the clerk in the store about prices. The clerk said she didn’t know why they varied, but everybody tells her they’re lower everywhere else.

At Wilco, Gary McCabe also spent $20 to fill his Cutlass. He said he knew prices were cheaper out of town but figured he’d burn up the savings driving to get to those places. His theory is that after gasoline prices hovered at about $1 a gallon for a while, oil companies then raised them very high. So now they’ve lowered the prices some — to the level the companies always wanted — and people think it’s OK because they had been so much higher.

“What are you going to do?” he said. “I don’t think prices will go back down.”

Gail McIntosh was filling a borrowed 1983 Buick at the next pump. She said it usually costs her about $20 and she didn’t really know why prices varied so much.

It’s hard to find anybody who has a clue.

AAA Public Relations Manager Kristy Tolley in Charlotte said the retailers are charged a certain amount from their providers, then the retailers can charge what they decided to pass on to the consumer. The state is broken down into zones, she said, and different zones would have different prices.

“You’re always going to have variations in areas because you have the supply-and-demand factor,” she said. “In an area where a lot of stations are vying for competition, prices will be lower. They can charge higher prices with a captive audience.”

Dr. Peter Schwarz, professor of economics at the University of North Carolina at Charlotte, has a more complex explanation. He said the price gaps seem larger than usual. When you compare prices from state to state, he said, such factors as state taxes make a difference. He’d heard of gasoline selling for $1.16 in Greenville-Spartanburg, S.C.

OPEC (the Organization of Petroleum Exporting Countries) sets import market prices, he said, and that affects prices overall, including American oil.

“For the past three-fourths of a year, OPEC has reorganized, and prices are more monopolistic than ever,” he said.

Schwartz said he thinks sometimes OPEC lowers prices for a while to discourage exploration by more U.S. oil producers, but then when they go up again, American producers follow suit.

As for the gap in prices between the Salisbury area and other locations in the state, Schwartz said, “One can guess that there isn’t a healthy amount of competition at the moment, so producers are trying to get a high price for as long as consumers are not aware it is cheaper somewhere else. It’s a curious situation.

“You don’t usually observe such large gaps. Idon’t have a good satisfactory explanation, which probably means there is something improper going on. As long as consumers are not aware of these differences, they are going to go along and buy the gas they need.”

If the distributors won’t talk about pricing, he said, that should tell you something.

The current price of gasoline is based on the cost of oil two weeks or so ago, Schwartz said. “Prices have been edging down, but now they are going to be heading back up as they put fuel aside for winter heating.”

 

   

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