Juneau's gas gap

Residents pay at least 60 cents more than the national average of $2.12 per gallon

Posted: Sunday, December 04, 2005

A gap is growing between Juneau gas prices and the national average and Alaskans are wondering when it will close.

Juneau residents are paying at least 60 cents more than the national average of $2.12 per gallon, according to travel club AAA and other sources. Alaska's average is $2.57 and Juneau's prices range from $2.75 to $2.85 for regular unleaded gasoline.

"They weren't as high as I thought they would be," said Leslie Foy, recently returned from vacation. "But we would like for them to be lower."

The Alaska prices caught the attention of Dayton, Ohio, Web site operator Brad Proctor.

"I've been looking at that and it's the oddest thing I've ever seen," said Proctor, who founded www.gaspricewatch.com.

Unlike months ago when Hurricane Katrina destroyed refineries on the Gulf Coast and there was a shortage of supply, Proctor said, "There's a lot of gasoline sitting around now."

The price of crude oil closed at $59.32 a barrel on Friday and Alaska North Slope crude oil sold for $57.47. Industry watchers say the cost of crude makes up 52 percent of the price per gallon at the pump.

Kip Knudson, government relations manager for Tesoro Alaska Co., said states in the Lower 48 are trucking their fuel around, rather than shipping it by barge and adding additional charges, as they do in Alaska.

Anchorage prices are an average of $2.43 a gallon, about 40 cents less than what Juneau residents pay now. Knudson added that Anchorage stations sell more volume of gas than remote regions of the state, and that allows the stations to charge less per gallon.

Juneau independent gas station manager Greg Cole, of Capital Service, said he's only pocketing 3 to 6 cents per gallon of profit. That's not enough to pay the bills, he said. Cole laid off three employees during the last two months, he said.

"I'm better off shutting my pumps down," Cole said, while prices continue to be high.

When prices come down in the Lower 48, or even in Anchorage, it takes several weeks to make a dent at local pumps.

Cole buys from a Juneau supplier who gets shipments every few weeks.

"The guy I'm getting my gas from is not making any money either," he said, not naming his supplier.

Both are stuck with the initial price of the bulk and must continue to sell it at the high price purchased until it's gone, Cole explained.

Brian Olson, Southeast Alaska vice president of petroleum wholesaler Delta Western, said it's difficult to bring shipments of fuel by barge every week because barge operators often wait until they have a full load before sailing.

Olson is wary of predicting the price of gas in the near future. But he said if trends continue, shipments to Juneau will be less expensive and eventually the cost savings will transfer to the pumps.

Two months ago, Juneau prices peaked near $2.97 a gallon for regular unleaded and prices today start around $2.75. Cole said that is a decrease most residents are not noticing.

Juneau motorists pay 20 to 25 cents in taxes, while some areas do not pay as much for taxes. Anchorage does not have a city gas tax.

Cole makes an effort to explain the price structure to customers. Still, the calls and the complaints continue to come in.

"I wish gas was cheaper," he said. "My life would be much easier.

• Andrew Petty can be reached at andrew.petty@juneauempire.com.

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