Idaho gas prices stay high

Before taxes, Idahoans pay the most in the Lower 48.

krodine@idahostatesman.comOctober 24, 2013 

Before taxes, Idahoans pay the most for gas in the Lower 48.

One reason: Profit margins among Treasure Valley gasoline retailers "seem higher than we normally see," said Brett DeLange, head of the Consumer Protection Division at the Idaho attorney general's office.

"It's running over 30 cents a gallon, and that, to us, seems high," DeLange told the Idaho Statesman.

Idaho's average gasoline prices have exceeded the national average consistently since May, according to AAA, the motor club.

John Jackson, whose Jackson Oil sells gas from 200 stores in four Western states, agrees that his pump profit margin is higher than normal right now, but adds, "Our year-to-date numbers are pretty typical. Margins jump up, and they jump down."

"(Wholesale) prices are coming down, and typically when that happens the margin gets better," Jackson said, partly because stations need to use up the gas they've already purchased and partially to earn a little extra money.

"But when prices go up, our margin gets squeezed," he said. About 10 cents of the margin goes to cover credit card fees, he said.

Throughout Idaho's distribution area, which also includes Utah and Montana, the retail margin is running more than 27 cents, DeLange said. His office does not track margins in other states.

As of last week, De Lange said, "rack prices" — what retailers pay — were running below $3 per gallon in the Boise area. Pump prices for regular gas were around $3.75 in Boise a week ago and remained at that level Thursday. Subtract the 25-cent Idaho state tax and the 18.4-cent federal tax, which retailers in every state must pay, and you get the margin.

Boise-area gas prices lately have been considerably higher than the state average, which was $3.58 for regular on Thursday and $3.61 a week ago, according to AAA Fuel Gauge. The national average was $3.33.

Including gas taxes, which are included in the pump price, Idaho falls from No. 1 in the Lower 48 to No. 4, DeLange said. That's because Idaho's state tax is half the 49 to 53.5 cents paid in Connecticut, New York and California — the only states in the Lower 48 with higher pump prices than Idaho's.

'HIGH PRICES ... ARE NOT A CRIME'

DeLange said his division closely monitors gas prices, which are important to Idaho consumers and frequently prompt calls to Attorney General Lawrence Wasden's office.

The attorney general's office occasionally investigates gas pricing. Its latest report was in 2008.

"High prices in and of themselves are not a crime," DeLange said. "Price-gouging is not a crime."

What is illegal, he said, is price-fixing — when stations get together and set a price. One station raising its price to match a competitor's is responding to the market, not fixing, he said.

In the 1980s, then-Idaho Attorney General Jim Jones prosecuted gas stations in the Pocatello area for price-fixing and reached a settlement. Idaho has had no such prosecutions since.

GEOGRAPHY IS ANOTHER FACTOR

It's not unusual for Idaho gas prices to outpace the national average, but seldom does the outpacing start as early in the year as it did in 2013 or last as long as it has, said Dave Carlson, who has been tracking Idaho gas prices for AAA since 1989.

Between March and August, while national prices were generally declining, Idaho's prices kept increasing.

"They zigged and we zagged," Carlson said.

As a result, consumer complaints are on the rise, he said.

"Conspiracy theorists will be saying something is amiss," he said, "but the big amiss thing is we are in an isolated area of the country that doesn't get too much access.

"Statewide, the general prices seem to reflect there are probably some tight supplies in the marketplace," Carlson said.

Jackson, however, said supply has been "pretty good."

DeLange agrees that Idaho's geography and relative access to gas contribute to higher prices here. The Treasure Valley and the rest of southern Idaho depend on gasoline piped in from Salt Lake City, he said.

"We're the only state in the West that doesn't have an oil field or a refinery," DeLange said. "And the demand puts pressure on prices."

Kristin Rodine: 377-6447

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