Jackson CEO says competition led to Friday's gas-price plunge

krodine@idahostatesman.comOctober 25, 2013 

gas prices, fueling station, economy

Caitlin Dill of Boise fills up her car Wednesday in South Boise. Idaho gasoline has cost more than the national average for about six months.

DARIN OSWALD — doswald@idahostatesman.com Buy Photo

On Friday morning, after the Idaho Statesman reported that Idaho’s gas prices included a higher than usual retail markup, prices fell noticeably at local pumps.

How noticeably?

“Two Jackson stores that I pass on the way to work dropped their prices 6 and 8 cents since yesterday," said Dave Carlson of AAA Idaho. Both stations offered regular at 3.699 on Friday morning. Consumers reported that prices at Stinker stations and others in Boise also showed cuts.

The price drop was 6 cents per gallon, Jackson Oil CEO John Jackson said Friday, and it was not prompted by Friday morning's story. Instead, he said, his stations cut their prices because a competitor had cut prices Thursday afternoon.

Jackson Oil’s profit margins were further reduced by a 2 cent increase Thursday in the price retailers pay to suppliers, he said, adding “that’s the volatility of margins.”

Jackson said earlier that profit margins tend to go up for a while when wholesale prices are falling, then down when wholesale prices rise.

Earlier this week, Boise area profit margins were running more than 30 cents per gallon. Jackson acknowledged Valley retailers had recently been taking a margin of more than 30 cents per gallon, but about 10 cents goes to credit card fees.

Stinker CEO Charley Jones could not be reached for comment.

Carlson said the Thursday-to-Friday overnight price plunge was unusually steep, though wholesale prices and nationwide gas prices have been on the decline.

Locally, he said, "prices have been going down, but they were doing so at half a penny or a penny."

Jackson said it's not unusual for prices to drop 6 cents in a day, but a half-cent drop would be unusual.

Carlson said this week's pricing changes show that "profit-taking is alive and well in Idaho."

However, he added, "AAA is the first to say that making a profit is neither illegal nor immoral — it’s a perfectly legitimate objective of doing business."

The Statesman's information about local profit margins came from the Idaho Attorney General's Office, which also reported that Idaho's gas prices, before state taxes are added, are the highest in the continental U.S.

Across Boise, the average price for regular gas had dropped by 2.5 cents by midday Friday, Carlson said, adding he expects further falling.

Statewide, Idaho's prices are still well above the national numbers, averaging $3.57 per gallon Friday compared with $3.32.

Kristin Rodine: 377-6447

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