Published 10/27/2012 in Local NewsBy ANGIE HAFLICH
As gas prices have been on the decrease nationwide, regular unleaded gas prices in Garden City were higher than the national average of $3.58 per gallon, ranging from $3.69 to $3.79 per gallon as of Friday, according to www.kansasgasprices.com.
The website also showed local gas prices ranging anywhere from 57 to 67 cents per gallon higher than in Topeka, where they ranged from $3.12 to $3.20 per gallon.
Patrick DeHaan, senior petroleum analyst at gasbuddy.com, said that the biggest contributor to the difference in prices has to do with competition.
"Garden City has a fraction of the stations. There just isn't the competition there to drive prices down, and it may come slowly, but how quick gas prices fall is a function of who's pushing them lower," DeHaan said. "And in big cities, say Topeka, there are more competitors that may be vying for volume, and in Garden City, there may be less competition or less aggressive competition."
DeHaan said that gas stations don't have an incentive to drop prices because of the subsequently lower profit margins.
"Now, they do eventually lower their price, as they make money, but if nobody's going to drop the price, from a business standpoint, stations obviously don't want to sell a product for less money, so what they do is they just take their time," he said.
Another factor behind the higher prices in not only Garden City, but also in other southwest Kansas communities like Hugoton and Liberal, where gas was at $3.79 and $3.75, respectively, on Friday, is the price that stations paid for their most recent supply of gas.
"Gas stations in say, Garden City, probably aren't selling a whole lot of volume. Normally, gas stations will buy gas every two to three days. In Garden City, it may be four to five, so they like to sell through their higher-priced inventory before they lower their price and buy another supply of gasoline. So that's certainly a culprit, as well," DeHaan said, adding that those stations that paid a higher price for gas will be less likely to be aggressive in terms of dropping their prices.
Therefore, until a station opts to lower its prices and other stations follow suit, gas prices in Garden City and other small communities in southwest Kansas could remain higher than in other areas.
"It's all a function of who's going to take the first step and start dropping their price and if anybody's going to be aggressive, but then again, why would they, when they make less money that way," DeHaan said.
As of Friday morning, Garden City's high price of $3.79 dropped to $3.69 per gallon, indicating a possible trend toward declining prices, but DeHaan said that it might take a few days for prices to drop to the levels seen in the bigger metro areas of the state.
According to www.fuelguagereport.aaa.com, on Friday, the national average gas price was $3.58, a 14-cent decrease from a week ago and a 23-cent decrease from a month ago. The average price for a gallon of unleaded gasoline in Kansas was $3.40, a 17-cent drop in the past week and a 40 cent-drop in the past month. In Garden City, average gas prices have dropped by seven cents in the past week and 12 cents in the past month.
"Wholesale gas prices have gone down because in the autumn, demand for gasoline typically wanes as the cooler temperatures prevail. Demand drops spur an increase in supply, which is pushing things downward," he said.
While the price of oil also plays a factor in gas prices, DeHaan said that the two don't always move in the same direction.
"People are so infatuated at looking at the price of oil that they forget that, just like oil is publicly traded at a price quoted, so are gasoline futures. What looking at gasoline futures takes into consideration is the health of refineries. Because if refineries aren't producing ... it's a kink in the system. You could have $10 a barrel oil and you could have $5 a gallon gas, if the refineries are outputting at a trickle. So, the refineries are a wild card," he said.
DeHaan said that while distribution costs to rural areas, such as southwest Kansas, play a part in the higher prices, that it is minimal.
"It may be a few more cents a gallon to get gasoline out there. I wouldn't think it's substantial," he said. "It's coming a decent way, but it's only going to add a few cents per gallon. I mean, we're talking about a 10,000-gallon tanker — it's not going to add up to a whole lot."
In comparing southwest Kansas communities on Friday, Garden City's average price for a gallon of unleaded gas $3.69, Dodge City's average was $3.60, Liberal's was $3.71, Syracuse's was $3.40 and Scott City's was $3.57.
Found 8 comment(s)!
For the people complaining Gas prices in Dodge were higher for most of the last year. This is completely unfair at the moment though. its only 3.16 in hays!
Posted by: Judy on 11/4/2012
Gas is currently $3.179 here in Olathe. I notice that gas is always higher in GC compared to Dodge, heck even Greensburg is lower.
Posted by: Luis Duran on 11/3/2012
Anyone thinking it's the guy collecting the money at the pump that is making the money is an idiot. The guys making the money have no vested interest in anything related to fuel other than the board of trade value. The guys you get your gas from make less than 5 cents per gallon and they have to pay their expenses too.
Posted by: A on 11/2/2012
why are gas prices higher here in garden than in laki,cimarron,dodge city where there is twomeat packing plants a casino and we that have none of that here arpaying any where rom 10 to cens higher this is crazy. Is it because our city comissoners hae to take our money that way because we dont have a casino or the plants so they can take it from that.
Posted by: shirley on 10/29/2012
Why so high?
Filled up in Hays on Friday. Gas at Dillons was $3.25 gallon.
Posted by: Visiting on 10/28/2012
Gas prices in GC
GC prices used to be lower than Cirmarron & Dodge earlier this summer but haven't been able to say that for a long time. Dodge & Crimarron had gas at $3.69 for most of Oct when GC kept theirs at $3.79. Now GC dropped to $3.69 but Dodge & Cimarron are $3.59. Last weekend gas was $3.31 in Lawrence, $3.40 in KC area, $.3.49 in Salina, $3.53 in Larned. i rarely buy gas in GC. Haven't been in Minneola in a while but they used to have lower prices than GC & Dodge.
Posted by: C on 10/28/2012
Greed greed greed
The owner of the pumps are just greedy . Bottom line! In Tyrone Oklahoma gas is 3.24 in hooker 3.49. Presto new owners ,kangaroo don't even live in Kansas what do they care. They drop gas a dime and the next week kick it up 20 cents. But what are we gonna do about it? Not a thing. I remember the one day boycott everybody filled up the day before! Lol Just face it we are just hamburger in a den of hungry lions!
Posted by: M on 10/28/2012
Article is a Joke
Syracuse, KS has fewer stations than GC and yet the lowest price. There is no logic in the article or the comments by DeHaan. The fuel buyers in GC are just getting clipped as usual.
Posted by: Ron Dirks on 10/27/2012