If you drove 40 miles to Shoshone instead of filling your car's gas tank at a Hailey station yesterday, you would've saved 16 cents per gallon at the pump.
This price discrepancy over such a short distance isn't an anomaly but a normality in the Wood River Valley, where customers typically pay more than nearby towns and state and national average prices. Idaho's average gas price yesterday was $2.95 per gallon, when the national average was $2.80.
The American Automobile Association tabulated these gas price averages and does so daily—available at fuelgaugereport.com—by surveying the last credit card swipe at 100,000 American stations from the previous day.
But why the markup in the Wood River Valley?
"No surprise there," said Dave Carlson, spokesman for AAA's Idaho/Oregon division. "It's a resort community."
Carlson said he's received many calls from people living in Oregon and Idaho resort towns questioning high gas prices. He said the higher prices are partly because of the higher-income "demographics" living there. He said that's also evident within well-to-do neighborhoods of Boise, where prices are a few cents higher.
Still, Carlson's reaction to prices of $3.16 in Blaine County spoke for itself.
"My goodness," he said.
He said gas stations typically mark up gas 5 to 7 cents per gallon above their costs.
Gary Peak has owned Bellevue gas station Splash & Dash for 14 years and said he prices his gas about 15 cents above supplier prices and mandatory gas taxes. But he's not making 15 cents profit per gallon because 3 percent of any purchase paid through a credit card goes to the credit card company.
"Eighty percent of business is done by credit cards," he said.
A price of $3.16 per gallon means Peak turns over 9 cents of every gallon to credit card companies. When Peak marks up fuel 15 cents, he only makes 6 cents per gallon, about 2 percent profit at $3.16 per gallon.
Peak said he doesn't survive by selling gas, and increasing the price anymore to do so isn't an option.
"You could drive it up, but you'll be out of business," he said.
Other stations would keep their prices low and focus on bringing customers inside the store.
He said products in his store are marked up 20 to 25 percent.
"That's where we make the money," he said, adding that it's the same story for all gas stations.
Despite product markups, Peak said Splash & Dash "broke even" from December through February.
If Blaine County gas station owners, like Peak, aren't marking up their gas more than an average American station, where are the higher prices coming from? Blaine County isn't the only Idaho area with higher-than-average prices. Idaho currently has an average gas price of $2.95, or 15 cents higher than the national average.
The state isn't charging more in gas tax. Idaho only adds on 25 cents per gallon, less than the national average of 29 cents. Federal gas tax piles on 18.4 cents more for all gas, no matter the state.
Carlson said Idaho differs in that supply is limited in the state, which drives prices up during certain times of the year, like now. He said this time of the year is when production is near its lowest because refineries are trying to get rid of their winter-grade fuel.
He said the state has few refineries and only one pipeline that follows Interstate 84, coming closest to Blaine County at Burley, 100 miles from Hailey. He said pipelines are the cheapest way to transport gas, which is why gas along Interstate 84 in Idaho costs between $2.95 and $3 currently. Trucking is always more expensive but needed to bring gas into the Wood River Valley.
Peak said the largest price determiner for him is the supplier, and since those delivering to the valley is limited, the prices he pays for fuel are unavoidably higher. He said he used to get fuel from Burley, but now gets it delivered from Pocatello, 80 miles farther away, because he doesn't have another option.
Still, Peak said he can't explain why the price increases the way it does for the gas to reach him.
"If I could figure out why, I'd be playing the stock market," he said.
Carlson said that over the time span of a year, Idaho's average gas price falls in line with the national average.
"But that's not the case right now," he said.
Trevon Milliard: tmilliard@mtexpress.com
Motorist Kevin West fills his gas tank at Mountain View Grocery south of Ketchum on Tuesday. Regular unleaded cost $3.19 at the pump. West said he paid $2.79 in Sandpoint. Photo by Willy Cook
