March 14, 1998 in Nation/World

Higher Gasoline Prices Fuel Sandpoint Anxiety Station Owners Say They’re Falsely Accused Of Gouging

By The Spokesman-Review

The electronic billboard towering over the Post Falls Flying J has an enticing message - especially for Sandpoint drivers.

The sign boasts regular unleaded gasoline for just under a buck. The same bargain can be had in Spokane.

The cheap fuel prices have some Bonner County residents asking: What gives?

Gas prices have plummeted to the lowest level in about two decades. But a cheap gallon of gas in Sandpoint still is $1.17.

Gas station owners here are regularly accused of price-fixing to get rich off the pumps.

The conspiracy theory is not only laughable, it’s insulting, station owners said.

“I wouldn’t still be driving my ‘72 Ford pickup if I was making so much money,” said Brince McKelvy, who’s owned Dairy Depot, a Chevron station, for 10 years. “If someone making $12 an hour at the mill wants to open a gas station they’d better get ready to take a cut in pay.”

Gasoline prices always have been higher than average in this resort town. Residents here pay more to have the fuel trucked from suppliers in Spokane.

The station owners also must pay Washington tax on the fuel when they purchase it. Add on about 45 cents a gallon in state and federal taxes and the profit margin on gasoline gets pretty slim here, said Arnie Rains, owner and operator at Payless Gas, a Conoco station just east of Sandpoint.

“I would love to sell my gas for 99 cents a gallon, but that is way cheaper than what I buy it for,” he said. “The only people who make real money off gasoline is the government.”

A weekly spot-check by the American Automobile Association showed the average price in Spokane for regular unleaded gasoline was $1.06 per gallon. Prices in Sandpoint hung around $1.17, while in Bonners Ferry fuel ranged from $1.13 to $1.15.

A spokesman for AAA said it does cost more to truck gasoline to remote areas such as Sandpoint. And most North Idaho stations buy gas from suppliers in Spokane, which is the closest outlet.

“How low other stations can go is immaterial to me. I know what it costs to get the fuel here and what it takes for me to make it,” McKelvy said. “But if I’m a penny higher than the guy down the street, I lose business. As far as getting together and setting prices, that’s a bunch of bull.”

Some Bonners Ferry stations may cut deals with Montana fuel suppliers and be a few cents cheaper than Sandpoint. Bonners Ferry also is more competitive. There are a bevy of gas stations in the small town, which creates a mini gas war. That helps drive down prices, said one station owner, adding the profit on a gallon of gas usually is about 3 to 5 cents.

“I have to make a few cents to pay for the gas pumps, trucking and employees,” said Nancy Hanson, President of Sand-Ida Services, which owns the local BP station. It’s not gasoline sales that make the money, though. Hanson said the gas pumps get people to stop. It’s the goodies inside the convenience stores that make the profit.

“There’s lot of stores that will sell gasoline at cost and lose money to get people into the store,” Hanson said. Sandpoint stations can’t afford to do that, she added, because they can’t buy gas as cheaply in the first place. Add in a fickle tourism economy that relies on summer and winter visitors and the gas station-convenience store business becomes a rough way to make a living, said Rains.

Like many of the gas stations in Sandpoint, Rains’ Conoco is family owned and operated. He works long hours, seven days a week.

“I’m not crying the blues, but if I was making such a bundle off gasoline I would be living a little better than I live. … I would be vacationing in Hawaii right now.”

, DataTimes ILLUSTRATION: Color Photo

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