Motorists shrug off rising Kingman gas prices
Gas creeps up to $2 range despite drop in cost of crude
KINGMAN - Motorist moods are mostly indifferent throughout Kingman as fuel prices are slowly creeping back up after record low prices.
Gasoline is above $2 per gallon at most stations across town and residents are getting mentally prepared for the uptick as the weather gets warmer.
"People are traveling so prices go up," said Kingman resident Jim Vinney outside Gas N' Grub on Hualapai Mountain Road where the price of regular gas was $2.19 a gallon. "It's been like that my whole life. It's not like there's anything I can do about it."
According to the AAA Fuelgauge report, the costly switch over to summer-blend gasoline at refineries has already taken place, and this special blend of fuel has begun to make its way to fuel terminals in many parts of the country. Although prices are expected to move higher leading into the summer driving season, consumers will likely continue to benefit from comparative savings due to the overall abundance of supply and the lower price for crude oil.
Sean Gray, a field engineer who works on slot machines and travels between Phoenix and his home in Las Vegas, was fueling up at the AM/PM on Stockton Hill Road Monday where the price of regular was $2.01 a gallon. He was content with the price variation between big and small cities.
"This is 10 cents cheaper than Las Vegas," he said.
Crude oil prices have steadily increased since January but have actually declined in the last month. Vinney and Gray both had the same concerns about the difference between the price of oil and gas.
"If oil prices aren't increasing, why is gas," Gray asked. "That's what I don't understand."
"They need to build more refineries," said Vinney, who lived in Montana up until 2 years ago. "We had refineries there. Gas prices were more reasonable."
Samantha Sullivan was fueling at Maverick on Andy Devine where regular gas was $2.01 a gallon and is extremely cognizant of area fuel prices. She drives more than 300 miles a week between Peach Springs and the Grand Canyon Skywalk where her wife works.
"I come to this gas station more often," she said. "Five miles up the road it's 20 cents more. I notice gas prices."
Station employees feel the brunt of customer's attitudes. AM/PM Manager Danny Singh said he has mostly happy customers.
"I usually have travelers from other states," he said. "They like that fuel is cheaper in Arizona. The locals don't seem to mind either."
GasBuddy Petroleum Analyst Allison Mac explained what influences fuel prices.
"Oil gets turned into many things: rubber, plastic. With gasoline there are different blends that are more expensive to make.
"We don't think prices are going to be jumping as much as we've seen in the past," she said. "A refinery explosion or major geopolitical tension would cause those kinds of price spikes."
"When the temperature goes up, gasoline evaporates quicker so stations need a cleaner blend," she said. "Demand goes up and gas stations know that."
Mac pointed out that crude oil and gas prices have been leveling off in the last week but will continue to rise about 10 to 20 cents by the end of April.
Kingman station owners explained why their prices fluctuate, including lack of refineries in Arizona, the cost of transporting fuel from other states, seasonal blends and - most significantly - supply and demand. They also pointed out that there isn't a lot of profit in the gas station business.
"The interest on my property goes up with fuel prices," Singh said.
Gas N' Grub co-owner Becky Bullen described some of the costs associated with running a gas station, including payroll, utilities, property taxes, rent, computer software for the fuel system and fuel pump maintenance.
"We use top of the line filters," she said. "Those are expensive."
Credit card companies get a percent of the fuel transaction as do the service providers for the card machines themselves. The rates don't change with the price of fuel.
"We're losing money or breaking even when the price of gas goes up," Bullen said.
Singh and Bullen say that they have to charge about 10 cents a gallon on top of the wholesale price to make any sort of profit from fuel. The stores make up sales in food, drinks and even souvenirs depending on their location.
Gas stations face the same challenges as food or clothing retailers do when big-box stores move into town. Bigger companies can lower prices to crush competition and make up the profits in other locations.
"We can't compete with the grocery stores or truck stops. They can afford to lose money," she said.
Large corporate-owned stations such as Chevron or Texaco are usually bound by contract to get fuel from those companies. Locally owned stations can get their fuel from whoever has the best prices and even then prices can be set by regional corporate offices.
That's one factor in how station attendants deal with customer complaints.
"We're doing what we're told," said one of the Maverick cashiers. "As for now everybody is saying 'It's that time of the year again'."