Suppliers say several factors determine what to charge
Santa Fe drivers were paying up to 45 cents more per gallon Thursday than their counterparts in Albuquerque.
Blame the market.
“It’s all market forces,” said Brewer Oil Co. President Charley Brewer. “There are lots of factors involved; that’s why we sell candy bars, liquor and burritos, because those products have a more consistent markup. Fuel is a disaster. You never know whether you’ll make (a profit) or not on any given day.”
Each gas station determines how much to charge for a gallon of gasoline, based on the purchase cost, marketing strategy and — this one’s important — what its competitors are doing.
“If there are particular retail stations in Albuquerque setting their price at a certain level, then others are lowering their price to match it,” said Gary Hanson, director of corporate communications for Western Refining.
Western and Brewer both supply gas to stations around New Mexico.
“Maybe somebody in Albuquerque is dive-bombing the price,” Brewer said. “You don’t know why when markets start moving down.”
The national average for a gallon of unleaded gasoline Thursday was $3.31, according to the Web site GasBuddy.com. The latest figures from the U.S. Department of Energy are from Monday, and put the figure at $3.48.
In Santa Fe, the price of gas Thursday varied between $3.38 and $3.29, putting the City Different right around the U.S. average. The Giant station at the corner of St. Francis and Cerrillos changed from $3.38 to $3.29 within the span of four hours Thursday.
But in Albuquerque, prices varied between $2.57 and $3.34.
Brewer called the gas market in Albuquerque “much more volatile than ours (Santa Fe’s).”
“There are different players in Albuquerque,” he said. “There are a lot of refiners in that market, in the actual business of refining. ‘Jobbers,’ like what you have in Santa Fe, are middlemen.”
Brewer is a jobber. He said Santa Fe also will have more expensive gas because everything here’s more expensive.
“Overhead in Santa Fe is a hell of a lot higher than everywhere else,” Brewer said. “You’ve got the living wage, which is higher, the cost of real estate and the cost of building. Everything in Santa Fe is relatively higher than anywhere else in the state.”
GasBuddy.com also features a weather-style map of the United States, with the varying price of gas represented by certain colors. Areas in which gas costs $3 or less are green. Except a small patch in northern Idaho, Albuquerque is the westernmost area in which gas costs less than $3.
In July, the price of a barrel of crude oil reached an all-time high of $147. This raised the cost to retailers ,who, in turn, upped their price to more than $4 a gallon. But Thursday, the cost of crude oil was $84.
“That’s another reason,” Brewer said. “They’re all fluctuating because of the price of crude. This has been pretty significant in the last month or so.”
Still, don’t underestimate the importance of competition. One gas station manager in Santa Fe, who asked not to be identified, said he calculates cost by entering the price of gas at surrounding stations onto a Web site.
“I’m not sure where it goes,” he said. “They may calculate it at the corporate office.”
Brewer said, “We go up (in price) when you watch your competition and see what your competition’s doing. I drive around every day to see what the competition’s doing.”
