Lazaro Aleman
ECB Publishing, Inc.
It's one thing to see gasoline prices drop below $2 a gallon across the state. It's quite another to see gas prices in Monticello be lower than in Tallahassee.
That, however, was the case earlier this week, with prices in Tallahassee around $2.10 a gallon on Saturday, March 28, and as low as $1.65 per gallon in Monticello at the same time.
The overall drop in fuel prices - reportedly unseen since the Great Recession of 2008 – is largely attributed to the double whammy of the coronavirus pandemic and the ongoing price war between Russia and Saudi Arabia, according to Mark Jenkins, spokesman for the American Automobile Association (AAA).
Jenkins explains that plunging oil prices have resulted in large part from Saudi Arabia flooding the market with oil, a situation exacerbated by the coronavirus outbreak.
“The effects of the coronavirus have snowballed,” Jenkins said, noting that the cancellation of airplane flights, along with the closure of big events and schools and companies asking their employees to work from home has led to a dramatic reduction of fuel consumption.
Which explains why fuel prices are low overall, but not why prices are lower locally than the surrounding area.
On Wednesday, April 1, according to the AAA, the average price of unleaded gasoline was $1.984 in Florida, $2.012 in Leon County and $1.931 in Jefferson County. Take a drive around town, however, and gas prices on Wednesday ranged from as low as $1.65 per gallon at Grubbs Petroleum on Pearl Street (the average price within the city was about $1.74 per gallon) to $1.99 per gallon at the fuel stations at the I-10 and U.S. 19 interchange.
For years, local residents have questioned why gas prices here are consistently higher than in Georgia and Tallahassee and vary even within the county itself. And the reasons given have usually had to do with economy of scale arguments and the alleged higher local fuel taxes here.
The local dealers interviewed were at a lost to explain the current anomaly of the lower gas prices here than in Tallahassee, but they readily acknowledged that they were not selling under cost. Meaning that they weren't losing money on the sales, however slight their profits might be.
“I know we're not selling under cost,” said one longtime employee at a local stations, who asked not be identified as she lacked authority to speak for her employer.
Randy Wheeler, owner and operator of the BP on the courthouse circle, didn't shy away from the question.
“No, we're not selling under cost,” he said.
His explanation for why fuel prices were always lower in Tallahassee than locally was that it was a ploy by the convenience stores there to draw in customers.
“In Tallahassee they're cheaper because the convenience stores sell the gas at cost to get the people into the store,” Wheeler said. “They usually don't make money on the fuel. They want you to go inside and buy stuff.”
“But now they don't have people buying as much,” he added, suggesting that the current higher prices in Tallahassee were a way for the businesses to make up for the fewer in-store sales.
“Too,” he added, “we got a little more taxes because of the local option gas tax.”
Whatever the reason, it's a good time to buy gas, if there are fewer places to go.
Wheeler, in fact, notes that fuel sales are slowing down, compared with a little earlier.
“First week was like a storm around here because of the coronavirus,” he said. “Everyone wanted to get gas. But now we're not doing much of anything.”
At the Grubbs Petroleum, however, Connie Barfield said business was still brisk.
“It's been a rush,” Barfield said. “They're buying it like it was toilet paper.”
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