Gas prices have dropped recently but are still above $3.00 per gallon. These prices were posted Monday, March 20, 2011, at QuikTrip, 1020 E. 23rd St. by Mike Yoder
When gasoline prices were lower in Topeka than Lawrence this spring, drivers started taking notice. Several weeks later, when gasoline prices along Interstate 70 and in small towns like Perry and Linwood dropped well below what Lawrence gasoline station were charging, people became angry.
“It is crazy,” said John Benson, who watched as prices in nearby cities fell while Lawrence’s barely budged. “What is frustrating a lot of people in Lawrence and a lot of people who come to work in Lawrence is: Why is Lawrence’s gasoline so high?”
Benson’s question is one that many have asked across town.
In May, for example, the price of gasoline was 16 cents higher per gallon in Lawrence than Topeka. Since then, the price has come down, but the gap between Lawrence and Topeka remained.
According to AAA’s Fuel Price Finder, the average price of gasoline in Lawrence was $3.39 a gallon on Friday afternoon. That was 5 cents higher than Topeka and 2 cents higher than Perry.
The disparity was greater a week ago, when gasoline prices in Topeka and in smaller towns such as Tonganoxie were at least 20 cents lower.
“I could drive to Perry, which is less than 10 miles away, and get it a lot cheaper,” Benson said.
Competitive market
Part of the answer has more to do with the market in Topeka than Lawrence.
Gary Haag, vice president of Haag Oil Company, owns two gas stations in Lawrence and about a dozen in Topeka.
“Well, Topeka is going through a shakedown over here,” Haag said.
Kwik Shop has opened two new stores in Topeka, several grocery stores have opened filling stations and there have been a couple of other gas stations that were closed and then reopened.
“There’s at least seven brand new large-format stores that have opened in Topeka and are pricing aggressively,” Haag said.
As a result, gas stations in Topeka are pricing gasoline at or below cost.
Increased competition seems to be a reasonable explanation for Jim Hanni, executive vice president of AAA Kansas. Hanni, who commutes between Lawrence and Topeka, has kept an eye on the price difference.
“There hasn’t been a lot of new convenience stores put into the Lawrence market lately, so it’s not quite as hypercompetitive as a market as it may be over (in Topeka),” he said.
Roller-coaster prices
While competition would explain the difference between the Lawrence and Topeka gas stations, it doesn’t justify why Lawrence has higher prices than the smaller towns around it.
Haag said that might have to do with the fact that Lawrence gets most of its gasoline from the Kansas City refineries, which are required to have gasoline that carries summer blends that result in fewer emissions. And while Lawrence isn’t required to use those summer blends, its gasoline supply could still be affected by it.
On top of that, Haag said, the price gas stations have to pay for gasoline has been on a roller coaster this summer.
“We have had five days in the last two months when it went up or down more than it did on Hurricane Katrina (when prices went up 17 cents),” Haag said.
If an owner of a smaller gas station buys gasoline at a time when prices are at their peak, they can be stuck at that price for days. Larger gasoline stations have an easier time absorbing the shifts in the market.
Price gouging?
Some, including Benson, don’t buy those explanations. He and others have used words such as price fixing, gouging and monopoly to describe how they think gasoline prices are being set in Lawrence.
Such accusations are hard to prove in court, said Jeff Wagaman, deputy chief of staff for the Kansas Attorney General’s office.
Under Kansas law, price gouging is when the price charged grossly exceeds the prices charged for similar products available to similar consumers.
Price gouging would be clear if gas stations were charging $3.50 a gallon in one part of city, but $7 in other areas. At lower amounts, say 20 cents, price gouging might be difficult to prove in a court of law, Wagaman said.
Price fixing is when there is an agreement between two or more people that affects the price paid by consumers. That also is hard to prove in court.
Wagaman named other reasons why gasoline prices could be higher in Lawrence. For example, gas stations have to take into account labor costs, property values and taxes when setting prices. Then there is the heavy demand on gasoline created by summer holiday and weekend traffic.
“Higher demand usually translates into higher gasoline prices,” Wagaman said.
Tom Palace, executive director for the Petroleum Marketers and Convenience Store Association of Kansas, said that gas station owners have every right to charge as little or as much as they want.
“We are the only industry to post our prices daily,” he said. “I’d like to know if (consumers) didn’t see the price sign up there, what would they think.”
So far no complaints about Lawrence’s high gasoline prices have found their way to the attorney general’s office. But, Wagaman said, consumers are free to make them.
“Prices have risen dramatically and we absolutely understand their frustrations,” he said. “If consumers feel like they are being gouged, file a complaint.”
Those complaints can be filed by calling 1-800-432-2310 or by going online to the attorney general’s website at www.ksag.org.
Tagged: gas prices
Comments
hoshi 1 year, 10 months ago
Was in Chicago a week or so ago. Gas there was a $1 per gallon higher than Lawrence. In CA where I travel quite a bit it is always $1+ per gallon higher. No consolation to locals, but it could be worse.
crispysyn 1 year, 10 months ago
I work in Topeka. I run the risk of running out of gas on the way to work, just so I can fill up in Topeka. I paid 3.19/gallon last week when it was 3.45/gallon here in Lawrence. Its rediculous despite the B.S. that the gas station owners are spewing.
nut_case 1 year, 10 months ago
Of course the flip side is: Even within Lawrence - one station will be priced high and right across the street, there will be a station with a substantially lower price, yet an equal number of cars gassing up at both.
Boston_Corbett 1 year, 10 months ago
“We are the only industry to post our prices daily,” he said."
Huh? Tom, have you ever seen a grain elevator, or farm feed store, or salvage metal dealer, for starts?
Curtis Lange 1 year, 10 months ago
This comment was removed by the site staff for violation of the usage agreement.
northtowngrl 1 year, 10 months ago
Not true. I work in KC and live in Lawrence. Gas in KC, right off the highway in downtown KCMO is ALWAYS .10-15 cents cheaper a gallon. Has been for a couple of years now.
Curtis Lange 1 year, 10 months ago
Really? My comment got deleted? lol, oversensitive idiots. Probably the same people that cover their child's eyes when a boob flashes on the television screen...
Anyways, yes, gas prices will nearly always be cheaper on the Missouri side due to tax differences. I should have clarified as I meant the Johnson County area. It was dumb for this article to compare Lawrence and Topeka anyway and not include the Kansas side of the KC Metro...especially when the article states that our gas generally comes from KC.
I know this is just me, but I've lived in Lawrence for 6 years now and have shopped/filled up my tank in Topeka less than a handful of times. I will never accept Topeka as the 'better' option to travel to for shopping/entertainment versus the KC Metro (again Overland Park/Olathe).
lionheart72661 1 year, 10 months ago
Oh it's just plain greed! Nothing more and nothing less. Kwik Shop,presto and a couple others get their fuel from the same hubs either in Topeka or Kansas City. Yet you go to these other stations across town and there will be a price difference. Depends on where you live! Big man exec. say "Hey!, we sell more gas over there so let's make it a little higher there!" Am I trying to be funny? NO! It's a fact and that is a form of price gouging. I don't care what they place in this article because they know most people will believe what they read!
Clickker 1 year, 10 months ago
I'm not really sure what you describe is price gouging. Sounds like good business to me. Every single business in the world does what you describe, or they are not very smart or out of business. Real estate? Why dont we price similar homes in different locations the same? If you had a house in Topeka and a House in New York City that both cost you $300 K to build, would you price both at $300 K? I doubt it.
I dont like it either, and it sounds like we need some new entrants into our market to bring prices down a little, although I suspect it is the Pollution blends that we are forced to use in our market that are driving prices up. Oh, and Taxes. Kansas just rapes us.
Clickker 1 year, 10 months ago
I'm not really sure what you describe is price gouging. Sounds like good business to me. Every single business in the world does what you describe, or they are not very smart or out of business. Real estate? Why dont we price similar homes in different locations the same? If you had a house in Topeka and a House in New York City that both cost you $300 K to build, would you price both at $300 K? I doubt it.
I dont like it either, and it sounds like we need some new entrants into our market to bring prices down a little, although I suspect it is the Pollution blends that we are forced to use in our market that are driving prices up. Oh, and Taxes. Kansas just rapes us.
moderationman 1 year, 10 months ago
I call BS! There are no "refineries" in Kansas City. There are distributors. Gas prices were lower in Wichita, Topeka and every surrounding small town east or west of Lawrence until just before the July 4th holiday weekend when prices miraculously rose $0.16 over night on the Turnpike and in Topeka. The stations in Lawrence simply charge more because they can.
dowser 1 year, 10 months ago
It seems that gas is cheaper almost anywhere else in Kansas and Missouri than in Lawrence. What's up with that?
Morganna 1 year, 10 months ago
I paid 3.15 last week in Perry. I live there and always buy my gas there - like to keep my money in the city I live in. Perry usually has cheaper prices than Lawrence. Always thought that was weird.
loosecaboose 1 year, 10 months ago
It is all relative. In Baldwin City, one of those smaller towns around Lawrence, we are usually ten cents higher than Lawrence, as we are right now.
tomatogrower 1 year, 10 months ago
I believe in keeping my money in the city I live in too, but not for gas. My business takes me out of town often enough, so I gas up elsewhere. All of their excuses above are bogus. In an earlier article they gave the excuse that Lawrence was using the more expensive winter mix, because they didn't need to follow the EPA guidelines and switch, now the summer mix is more expensive? And you can't tell me that all of the gas stations up and down 23rd street are owned by the same people, yet they all have the exact same price. I'm thinking of making that phone call about price gouging. Not sure if they can prove it, but I hope they try.
sunshine_noise 1 year, 10 months ago
Well if you take notice of the gas stations on 9th street...they have always posted different prices then the rest of the town. They lower their prices during the week then raise come Thurs thru Sun. There should be a law. I've notice though gas is not the only prices that has risen in Lawrence. Yesterday I noticed the vender prices at the part were high too. Groceries has gone up too. I don't know how people are going to survive if prices keep rising.
tolawdjk 1 year, 10 months ago
http://www.theodora.com/pipelines/united_states_pipelines.html
Now, this is the bulk US distribution pipeline map. Blue is refined/finished product, Red, natural gas, green, oil.
As you can see by that, there isn't a whole lot of difference between KC and Topeka, other than KC is a terminal point for several pipelines as it feeds through the Midwest. As it leaves the gulf, refined product can get to KC on it's way to the rustbelt, and vice versa.
http://www.eia.gov/state/state-energy-profiles.cfm?sid=KS
As you can see here, there are three operating refineries in KS.
http://www.eia.gov/state/
However, if you look at that map, you can see that while there are three operating refineries in KS, there are zero refineries in IA, MO, and NE. Everythign else is to the south of us. Refined product in KS has three options...piped in from Chicago or the Gulf, railed/trucked up from OK, or homegrown in one of our three and then trucked to location.
Triple AAA would have you believe that magically, somehow, gas in Perry is refined differently or to a different end point than the gas in Lawrence because Perry gets its gas from a different local than Lawrence, which has to siphon gas from the KC market. I've been to Frontier in ElDorado, NCRA in McPherson and Coffeyville Refining in Coffeyville. They don't have the capability to blend to that wide of an audience. If they make "summer" gasoline, its the same stuff every day, not "Perry" summer or "KC" summer.
To have the AAA dunderhead blow smoke up people hiney when obvious data is obvious is insulting. KC does have it's own special blend gas, that is a given. However, to expect that every service station is tied into that blend is rediculous, given there is no mandate for it in DG county. Kwik Shop could just as easily buy from any distributor west of Silver Lake and get non"KC" gas at a lower retail price.
There is market colusion in Lawrence. Proving it would be difficult, so its not done.
jimlube67 1 year ago
A year after this article and it is still the same. I work in Topeka and usually wait to get gas there. I go to the Dillion's on 24 highway and it is consistently .10 cheaper then the Dillon's in Lawrence. Usually the Lawrence price will come down, but not for long.
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