Home > Uncategorized > The Humboldt Gas Scam (or, your annual $150 ‘tax’ surcharge)

The Humboldt Gas Scam (or, your annual $150 ‘tax’ surcharge)

The Humboldt Herald has added a new “Quick Notes” style section, “Humboldt Gas Scam.”  It’s accessible by clicking on “Humboldt Gas Scam” just below the Herald banner, and the Herald hopes it will become a place to share information about the Chevron terminal, the local jobbers, the local stations, and the way in which prices around here get determined.

Willits Safeway is selling gas at $4.37.  Other Willits prices range from $4.39 to $4.50.

A cruise from Giuntoli Lane on down Central Avenue in McKinleyville demonstrates the complete lack of local price competition: seven or eight gas stations on the same two roads, all within a few miles of one another, many across the street from one another, all pricing at $4.59 branded, $4.57 or $4.56 unbranded.   Trinidad, ten minutes farther from the “terminal” than McKinleyville: $4.62.

There are several players who all point the fingers at one another, and we are regularly told that the problem is our distance from the Bay Area terminals.

But it’s less expensive to barge gas than to truck it, there doesn’t seem to be anyone attempting to reduce the cost of trucking by setting up relays, there’s only one terminal, and there are only a few players at the jobber and station levels.

And then there’s the most obvious piece of evidence that no competition is taking place: the lack of any visible price variation along stretches like Central Avenue in McKinleyville.  At the least, it would be reasonable to expect a station or two to advertise discounts for cash or debit.

The new “gas scam” section of the Herald is a place where people can drop what information they have.  Let us know what you know about the Chevron terminal, about a jobber, about a station.  If you have knowledge of the cost of trucking gas, let us know.  Same with barging.  How much goes to credit card companies?  Let’s accumulate enough information to begin to piece together the puzzle, since the players thrive on consumer ignorance and it doesn’t appear that government is going to help.  Anti-monopoly regulation is just so passe.

  1. just middle class
    October 22, 2012 at 8:19 am

    Most credit card agreements do not allow you to discount for not using a credit card.

  2. Mitch
  3. Mitch
    October 22, 2012 at 8:41 am

    Not to mention: http://www.ocregister.com/articles/credit-344140-cash-card.html

    Part of the retailers’ agreement (with credit-card companies) was you could not charge a differential price for credit cards vs. cash,” said McKeeman, whose association members own both independent and branded stations.
    But the credit-card companies agreed under the settlement to stop enforcing that provision, he said.
    “That’s basically why you’re seeing (dual pricing) more and more now,” McKeeman said. “With the price spike going on, it’s motivated some of the merchants to be proactive where this (credit-card) fee is involved. I think you’re just seeing it more and more as prices go up.”
    Marie Montgomery, spokeswoman for the Automobile Club of Southern California, which monitors gas prices, concurred that dual pricing at the pump has been spreading.

    But you’ll only see merchants trying to gain a competitive advantage on price when competition exists. For example, outside of Humboldt County.

  4. anon
    October 22, 2012 at 9:15 am

    Gas wholesalers fax a recommended price sheet to sell gas to the gas stations each time there is a price change. The independents understand they must change if they want future shipments.

  5. jr
    October 22, 2012 at 9:20 am

    Since the convenience store is the profit center for most, if not all, gas stations, one should never patronize such stores. Just go in, gas up and leave. To quote Michael Pollan, “Never buy your food where you buy your gas.”

  6. Mitch
    October 22, 2012 at 9:21 am

    QuickdrawMcGoogle sent this in, about the price of shipping gasoline over oceans:

    http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6092842

    It mentions something called ATB’s, articulated tug barges, and cites prices of about five cents per gallon to cross from Europe to the US east coast.

  7. Mitch
    October 22, 2012 at 9:23 am

    #4,

    Thanks, that makes perfect sense. Thirty or forty years ago, that would probably have been cause for a government investigation. (Why does an independent business operator need a recommended price? They know what they paid, after all, and they know what profit margin they need.) If you could email a “recommended price sheet” to the Herald or get it placed anywhere on the web, I’d be grateful. Even just knowing the prices “recommended” would be helpful.

  8. Anonymous
    October 22, 2012 at 10:43 am

    I filled up before 9am this morning at Costco – 4:19/gallon reg.

  9. Just Middle Finance
    October 22, 2012 at 10:53 am

    Ka-Ching! Free Enterprise baby! More whining about the Freedom to charge my community as much as we can possibly get away for gas with while paying minimum wage to our fellow Americans. This is ALL TOTALLY LEGAL! Get used to it. My family wants to buy more rental housing units so we need to spike the gas prices a little more to pay for it. Hey we gotta buy low and rent high, thanks suckers!

  10. Mitch
    October 22, 2012 at 11:02 am

    Good advertisement for Costco, #8, although I’d be surprised if their price is actually that low today. But I’m a member of Costco, a fan of it, and I’d advise anyone to join.

    Unfortunately, it has only one gas station, and that is in Eureka.

  11. Anonymous
    October 22, 2012 at 1:06 pm

    Costco is $4.19 today. Reported as of 3 hours ago.

    If you want change, it seems the only practical thing we can do is to always gas up at Costco. Assuming you don’t live too far out, do what I do. My shopping trips are oriented around when I’m likely to need gas up. Shopping at Winco as opposed to Safeway, Ray’s or Murphy’s, more than makes up the difference in gas mileage spent going to Eureka.

  12. Mitch
    October 22, 2012 at 1:32 pm

    Costco is members-only, but most people can figure out a way to become members. And keep in mind that the actual gas price is discounted by an additional 3% (I think) if you use Costco’s credit card.

    Costco’s an interesting place. Their store brand, Kirkland, seems to be very high quality, unlike many store brands. And the company has a reputation for treating its employees fairly, including advancement from within. It’s kind of the anti-Walmart of big boxes.

    It’s a shame that their only local outlet is in Eureka. Costco uses gas as a draw to the warehouse store, so they wouldn’t have a reason to open satellite gas stations. But somebody might be able to make a business out of buying their gas at $4.19, trucking it to McKinleyville, and under-selling the stations there.

  13. Plain Jane
    October 22, 2012 at 1:41 pm

    I buy my gas at Costco so I can afford to shop at Murphy’s and Eureka Natural Food which carry local meat and produce, unlike Costco, Winco, Rays or Safeway.

  14. LDC
    October 22, 2012 at 2:07 pm

    That’s probably about right. I was so angry during my first ten years here that I calculated the excess price we were paying annually; for two cars over ten years cost us an average of 2,500. more than the price we regularly paid in the Bay Area. Now I’m afraid I’ve given up; there seems to be no relief from the stranglehold up here. I believe that the State of California actually looked at it once (under Pete Wilson?) but still no answer.

  15. Not A Native
    October 22, 2012 at 2:56 pm

    For those here who believe HumCo is a ‘special Paradise’ isn’t it justice to pay a premium to reside in Paradise?? And local retail stores of all kinds, not just fuel, charge more than similar stores elsewhere.

    Mitch is big into ‘localism’. Well it seems Mitch is sympathetic only with locals who have less than he does, so Renner doesn’t qualify. Mitch is a whining and lazy complainer who pounds his keyboard calling for someone else to do the hard work of getting real facts. Who the hell ever appointed or wants Mitch to be a fact collector anyway??

    When you get right down to it, Mitch is channeling Hi Fi who welcomed Wal-Mart because he resents that local merchants have always charged more for goods than say Santa Rosa. Both are unable to see beyond their egotistic nature that seeks to privilege themselves at the center of attention.

  16. Mitch
    October 22, 2012 at 3:24 pm

    OK, NaN. That’s a whole lotta words.

    First, no it’s not justice to pay a premium to Renner in order to live in paradise. It’s a worm in the apple.

    I’m sympathetic to fairness. Sometimes, fairness means buying local. Sometimes, it means the opposite. When locals are engaging in a ripoff, it means don’t buy local. I’ve already said Coast Central is a ripoff and recommended Provident. Same issue here — a couple of greedy locals are taking advantage of the neighborhood; I’d love to see them lose some of their business.

    Excellent misdirection regarding my “pounding the keyboard calling for someone else to do the hard work of getting real facts.” Yes, I believe that providing a place for people to pool information about a scam is sensible. As for being appointed fact collector, you’re right, no one has appointed me fact collector. Very good, NaN. You are absolutely correct. I am a self-appointed fact collector, guilty as charged.

    Channeling “Hi Fi”? OK, sure. Yes, neither of us can see beyond our “egotistic nature that seeks to privilege themselves at the center of attention.” I have found the world’s center of attention, the Humboldt Herald. From Herald world headquarters, deep under H Street in Eureka, I stroke my ego and plot your downfall. Nyah, hah, hah.

    Or do you want a serious response? I don’t have any, beyond suspecting that you simply found the name you thought I’d find most annoying, and slotted it into the spot in your template for the coup de grace. You’re a strange soul, NaN, but then so am I.

  17. Not A Native
    October 23, 2012 at 1:26 pm

    Nah, not the world’s center of attention, you’re seeking only local acclaim, to be a big fish in a little pond, like Hi Fi(and many other local also rans). My issue with you as fact collector is you demonstrate no ability to accurately make conclusions from facts or evaluate purported facts for consistency with established facts.

    Your opinions seem colored by a lens of an angry adolescent who just discovered that the simplistic things he was told and believed as a child were half truths or untruths. He’s really angry at those who “deceived” him and having now to grow up, but displays it by railing against larger truths adults are charged to contend with. One of those truths is that the dividing line between good and evil passes through every person’s heart. The righteous justice of eliminating evil that Mitch demands requires killing everyone.

  18. Mitch
    October 23, 2012 at 2:15 pm

    NaN,

    Your second paragraph is true enough until the last sentence, but utterly irrelevant to the topic at hand. As for the last sentence, I don’t wish to eliminate evil, I just don’t want to pay a local surcharge for gasoline.

    If you’re concerned I’m not good at reaching conclusions from facts or evaluating facts for consistency, you’ll be happy to know that every reader of this blog is welcome to evaluate purported facts on their own, and reach their own conclusions. Maybe if you present some purported facts related to the topic, readers will agree with you.

    I’ve just yet to hear a convincing explanation of why gas prices magically rise $0.20 to $0.50 per gallon between Willits and Garberville.

  19. October 23, 2012 at 8:33 pm

    Interesting topic. I’ve learned more here than anywhere else on the subject since I came to McKinleyville in 1979. I’ll be following this “Humboldt Gas Scam” with great interest. Thanks

  20. October 24, 2012 at 6:01 am

    The gas scam in Humboldt is an issue and I do believe it is caused by lack of competition rather than the cost to get it here. I hope some people are able to turn up some good dirt. In the meantime, if this continues, there are always ways to fight back.

  21. Mitch
    October 24, 2012 at 7:58 am

    Doug,

    I wouldn’t be surprised if many station owners are mortgaged to the hilt. The prices they paid for their stations reflect the high margins gasoline gets here, so their mortgages might well end up underwater if margins get whittled down to normal levels. I suspect they, like consumers, are victims of those who own larger groups of stations, of those who operate the barge terminal, and of the jobbers who can supply a station or not.

  22. Anonymous
    October 25, 2012 at 2:58 pm

    Back when James Tressler did a story on this for the TS he said barging the gas here ran about 10 cents a gallon vs. trucking it half way here (say Willits) was running about 25 cents. The difference ends up in Renner’s pocket as far as I can tell.

  23. Mitch
    October 25, 2012 at 8:34 pm

    I was in Eureka today. Costco is selling gas at $3.99, for an effective price of $3.87 if you buy it on their credit card and get the 3% rebate.

  24. Anonymous
    October 25, 2012 at 9:48 pm

    Renner or Chevron’s pocket? Nobody knows because nobody with info is talking. You’re just blowing smoke #22.

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