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Taxes, supplies causing higher gas price, AAA says
It's still more in N.C. than neighboring states
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Published: October 28, 2008
Mix higher gas taxes in North Carolina with lingering disruptions in the gas-distribution system and the result is higher prices than in neighboring states, analysts say.
Just take a look at the gas prices near the North Carolina and Virginia state line yesterday.
Regular unleaded gasoline was at $2.49 a gallon at the Cana Exxon Stop in Cana, Va.
Yet it cost a dime more a gallon at the Neighbors Stores in Mount Airy, less than three miles away.
The price in Mount Airy was a bargain compared with the rest of North Carolina, where the average price of unleaded gasoline was $2.76 yesterday. The average in Virginia was $2.54 and $2.53 in South Carolina, according to AAA Carolinas.
Gas prices in North Carolina peaked Sept. 15 after Hurricane Ike hit Galveston, Texas, disrupting pipeline supplies from the Gulf Coast and causing gas shortages at stations in the Southeast.
Gas prices have been falling in recent weeks, and consumers can now buy gas below $2 a gallon in some parts of the country. Plummeting oil prices and reduced driving are pushing prices down across the country.
Different gas-tax rates in the states account for part of the price differences. Combined federal and state gas taxes are 48.6 cents a gallon in North Carolina, 38 cents a gallon in Virginia and 35.2 cents a gallon in South Carolina.
And some gas stations in North Carolina are still struggling to get enough fuel delivered because of supply disruptions caused by hurricanes, said Carol Gifford, a spokeswoman for AAA Carolinas.
"It's not nearly the issue that it had been and we're pretty much back to normal, but we think that still has some impact on the price because it depends where some of the retailers are getting their gas," she said.
Some North Carolina stations are still relying on gas shipments from Tennessee or other areas of the country, which can cost more and therefore drive up price.
Jason Toews, the co-founder of the Web site GasBuddy.com, said that competition levels in states also can affect gas prices. GasBuddy.com is a consumer-advocacy group for gas prices.
"Depending on the mix of gas stations in an area, their pricing strategy and how price-sensitive people are, stations will get more competitive," he said. "If you find that there is a pocket of stations that are competitive, it forces other nearby stations to be more competitive too. It seems to have a domino effect."
Janet Atkins, the manager for the Neighbors station in Mount Airy, said that competition drives the price of gas at her station. Her prices were well below the state average yesterday, and the stations in Virginia are typically 6 cents to 7 cents cheaper, she said.
In Winston-Salem, prices ranged from $2.44 to $2.89, according GasBuddy.com.
One gas distributor with several gas stations at the Virginia and North Carolina state line in both states blames the government in North Carolina for much of the disparity in prices.
"It's the state government attitude to tax without regard to the economic consequences in the border counties and beyond," said Joe Harrell, the president of Harrell Oil Co. in Mount Airy.
Harrell said that the gas shortage is abating, but it's not over.
"Certain suppliers are still unable to fulfill their customers' requirements," he said.
Some local drivers are keenly aware of cheaper prices in other states.
During a trip to Washington last weekend, Melissa Johnson of Winston-Salem stopped because she saw a sign at a service station in Virginia with gas at $2.40 a gallon, a real bargain at the time.
"I filled my whole tank up and it was less than $40," she said. "I got very excited because I knew I had a long drive. It saved me a lot of money to be able to put gas in there than here."
■ Fran Daniel can be reached at 727-7366 or at fdaniel@wsjournal.com.
Peak prices
Gasoline prices in North Carolina peaked Sept. 15. Prices in North Carolina have fallen, but they are higher than four neighboring states. Here's a comparison through yesterday:
- Sept. 15 - Oct. 27
N.C. - $4.09 - $2.76
Tenn. - $4.12 - $2.56
Virginia - $3.78 - $2.54
S.C. - $4.12 - $2.53
Georgia - $4.16 - $2.52
Source: AAA Carolinas
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