Local gas prices vary wildly, but top state, national averages

By Brian McNeill

Published: October 13, 2008

Although local fuel prices have plummeted by 21 cents in the past week, the cost of a gallon of gas in the Charlottesville area remains vastly more expensive than in
Northern Virginia, Richmond, Roanoke, Norfolk, Lynchburg, Waynesboro and nearly every other locality in the state.

The average price of regular gas in the Charlottesville region was $3.43 on Monday, exceeding the statewide average of $3.12 and the national average of $3.21. A week earlier, Charlottesville-area service stations were charging an average of $3.51 for a gallon of regular gas, according to AAA Mid-Atlantic.
Prices at the pump varied widely throughout the region Monday, with gas prices as low as $2.89 and as high as $3.53.
In Crozet, one Shell station on U.S. 250 was charging $3.09 per gallon, while a station directly across the street was charging $3.39. A few miles down the road, just off Route 151, the price was $2.99.

“The prices are changing very quickly. They’re coming down,” said David Sutton, president of Tiger Fuel Co., which operates a dozen local gas stations and provides oil to roughly 100 others. “Right now, Charlottesville’s prices are a little higher than elsewhere, but they’ll come down, certainly by the end of the week.”
High-volume gas stations are generally charging less than some others, Sutton said, because they are resupplying with gas bought at a lower rate. Stations with less volume are charging higher prices, he said, because they have not yet run out of the more expensive fuel.

The Charlottesville region’s market, he said, does not consume gas as rapidly as places like Hampton Roads, Northern Virginia and Richmond. Consequently, Charlot-tesville’s prices sometimes lag behind when it comes to price, he said.
“This is not a high-volume market,” Sutton said. “Our prices don’t change as quickly.”
The nation’s economic downturn has led to an overall decline in demand for gas, prompting the price of crude oil to fall below $80 per barrel Friday — the commodity’s lowest price in 13 months. Crude oil prices rose a bit Monday as the stock market rebounded, closing at $82.52. A little more than three months ago, the price of a barrel was at an all-time high of $147.27. When crude oil prices fall, the price at the gas pump tends to decline shortly thereafter.
Last week’s crude oil price freefall is evidence that the oil bubble has burst, said Michael J. O’Connor, president and chief operating officer of the Virginia Petroleum, Convenience and Grocery Association.

“Why have prices dropped so substantially? It’s because the prices should never have been that high to begin with,” he said.
O’Connor blamed excessive Wall Street speculation for driving up the price of oil beyond its actual value.
“Hopefully we won’t see that kind of greed again anytime soon,” he said.
Martha Meade, a AAA spokeswoman, predicted that Virginia’s fuel prices will continue to drop.
“The economy is tanking, but at least it’s not costing as much to fill up the gas tank,” she said.
Meade has often wondered why Charlottesville’s gas prices are historically higher than other corners of Virginia. One reason, she said, might be that oil supply companies have decided Charlottesville is affluent enough to pay for the steeper prices.
“It may be that they’ve decided that these are the prices the Charlottesville market can bear,” she said.

Alan Kretsos, a Fluvanna County resident who commutes to work each day to Charlottesville, is angry that local gas prices are the highest in the state. His wife recently drove through Farmville, where a gallon of regular was 25 cents cheaper than in Charlottesville. Richmond, he pointed out, is now averaging less than $3 per gallon.
“Why the big discrepancy? It doesn’t make sense,” he said. “We’re being squeezed and no one’s making a big deal about it.”
The Charlottesville market, he pointed out, is dominated by a small handful of gas suppliers. The area, he said, needs more competition to drive down prices.
“As a middle-class American, I just feel like the buck’s got to stop somewhere,” he said. “We’re not on a remote island here. We’re not in Alaska. This is Central Virginia.”
Kretsos, who once owned a service station, has called the state’s Office of Consumer Affairs to complain. The agency, he said, has yet to return his calls.