Local gas prices affected by crude oil, location and competition
Marie Moyer
COLUMBIA, Mo. (KMIZ)
As the war in Iran continues, gas prices have been climbing, with ABC reporting that costs are now at their highest level in nearly two and a half years.
According to AAA, the average cost of a gallon of regular unleaded gas in Missouri is $3.43, about 10 cents more than last week. The group also reported that a gallon of gas cost around $2.54 the month prior.
In Missouri however, gas reportedly ranges from $3.13 to $3.78 per gallon, with gas typically being on the lower end on the western side of the state.
Oil prices have been fluctuating since war broke out with Iran, with the Iranian government closing the Strait of Hormuz.
Locally, Columbia is seeing some prices range from $3.39-$3.49 per gallon. Jefferson City is seeing costs from $3.26-$3.29 per gallon in some locations. Boonville is seeing the lowest prices, ranging from $3.14-$3.19 per gallon at some stations.
According to the National Association of Convenience Stores, 90% of the price of gas is determined before the retailers put a cost on the gallon. The U.S. Energy Information Administration broke down gas retail costs. They found that crude oil dictates the majority of costs, affecting 51% of the final price.
The NACS reported seeing the cost of oil per barrel even spiking by around $17 dollars in a single day.
“Retailers who may have bought fuel in a two-hour time difference might find that their wholesale cost is $0.15 different, and that’s what we’re seeing right now across the landscape,” said Jeff Lenard, who is the vice president of NACS Media & Strategic Communications.
Lenard added because gas stations receive fuel deliveries at different times, prices can change from station to station, even in the same town.
Federal and local taxes, as well as refining costs, play a major role. While distribution and marketing sit at around 18%, this can vary depending on whether the station is an individual gasoline retailer and where the gasoline fueling station is located.
“The typical markup on a gallon of gas over the last five years is about $0.38,” Lenard said.” From that, they pay about $0.20 in expenses, credit card fees, etc., so on a gallon of gas, they’re looking at maybe $0.15-to-$0.20 profit.”
Local competition and real estate costs can also affect the cost of gas from station to station.
“They [gas stations] know that somebody will drive 5 minutes out of their way to say $0.05 a gallon. They want to be as competitive as they can because if they’re not selling that gallon of gas or that fill up to that customer, the customer is also not going inside the store and buying anything else,” Lenard said.
Lenard described why rural areas tend to see lower prices.
“That’s because there’s less competition, it’s also because the real estate is lower, you don’t have those pricy four-way intersections where every retailer that wants that real estate is bidding upon that and it’s more expensive,” Lenard said.
ABC 17 News spoke with around a dozen gas customers getting gas at local stations, and all residents reported not having many alternatives in terms of price.
“What else am I going to do? I did notice that it went up, but, you know, I still need gas,” customer Chellen Logan said.
AAA reports the current national average for a gallon of regular unleaded gas is $3.97 per gallon. Missouri ranks in the top 10 states with the lowest average cost at $3.43 per gallon.