Suncoast Pinellas News
Gas Prices Driven Locally By Numerous Factors
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Published: January 8, 2008
PALM HARBOR - As gasoline in the Tampa Bay area hovers around $3.10 a gallon, Isaac Kwak at Red Rabbit Retail Center is selling a gallon of regular for $3.01.
"I always try to keep the best price for the customers," said Kwak, who manages the gas and convenience center along busy U.S. 19 at Klosterman Road in north Pinellas County.
It gets a bit more complicated than that, though. In the wacky world of gas pricing, fluctuations can be major and the reasons can vary greatly.
The main reason is that retailers selling gas blended with up to 10 percent ethanol can charge less because of federal tax rebates, said Jim Smith, head of the Florida Petroleum Marketers and Convenience Store Association in Tallahassee.
"They have a price break because of the federal subsidy on ethanol," Smith said. "So they're going to be cheaper. Anybody that's selling an E-10 ethanol blend has an 8 to 10 cent price advantage over anybody selling conventional gasoline."
Until enough ethanol is made available in Florida for all retailers, price disparities will continue to exist in certain markets, Smith said.
Kwak, though, said he does not sell ethanol-blended gasoline at Red Rabbit, which comes as a surprise to some of his customers.
"They think something's up, but we have straight gas," he said.
Besides ethanol, other factors are at work in the price of gas, said Gregg Laskoski, managing director of public relations for AAA Auto Club South in Tampa.
"Some of it has to do with when they take delivery of their shipment," he said. "Some of it has to do with their overhead costs, just the cost of doing business to open the doors. And it also has to do with local taxes. All those things can impact" pricing.
Smith agreed that delivery has a lot to do with gas prices.
"Oil companies are changing prices as fast as crude oil prices are changing; you may get three price changes in a day," he said. " "You got your delivery at 8 o'clock this morning, and your competitor [two blocks away] didn't his until 4 o'clock this afternoon. It could be 8 cents a gallon difference in cost."
Zone pricing, in which oil companies use demographics to determine how much customers in a given area can afford to pay, also affects prices, Smith said.
"There are so many variables," Smith said. "Not everybody buys at the same cost, and not everybody can sell at the same price."
Reporter Carlos Moncada can be reached at cmoncada@tampatrib.com or (727) 451-2333.
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