Local gas prices dipping closer to national average
12-cent average difference compares with 54-cent spread in November
Gas prices in metro Buffalo are nearing the price found in other cities upstate and nationally.
The average price locally stood at $1.84 Wednesday, 12 cents over the national average of $1.72.
That’s a far cry from the 54- cent spread on Nov. 24.
At that time, the Buffalo Niagara region was listed as the ninth most profitable metro area to sell and supply gasoline by Oil Price Information Service, a leading source on petroleum pricing.
“I am absolutely happy that prices are coming down,” said Christine McDonald of Niagara Falls, as she filled up her tank at a Crown gas station in the Town of Niagara.
“I hope the [lower] prices will continue, but I don’t have any confidence they will. They always go back up,” she said.
The drop in area prices began shortly after a Buffalo News investigation in mid-December found a lack of competition was driving up area prices along with a lack of regulatory oversight on wholesale and retail pricing.
The article found Sunoco, the only refiner and direct marketer serving the area, exerted a disproportionate influence regionally in setting prices.
The downward trend in gas prices has been interrupted this week, as wholesale prices across the country have risen dramatically.
“Wholesale prices have increased 40 percent in the last two weeks, 20 cents in the last three days,” said Michael Newman, executive vice president of Noco Energy Corp.
“There’s just no way to translate that to the street. Can you imagine if I moved my price 18 cents today?”
Floyd Huntz, owner of Bethford Auto & Tire in Blasdell, said because his competition hasn’t raised its prices, he can’t either, even when it means selling gas at a loss.
“Sunoco is the only significant name brand we have out here, and right now they’re selling it for less than my cost,” Huntz said. “But the company is making some money on the refining end, probably a significant amount.
“I had 20 cents of increases in two days, but I can’t go out there and raise my prices that fast. I wouldn’t have a customer left.”
Huntz said it’s already a long way from the profitable days of late 2008, when, he said, “We had made better profits than we had ever seen.”
Huntz said he’s worked in the gas business for 41 years, and he’s never seen such price volatility as the past two years.
That volatility was evident in the oil market Wednesday, as the price of a barrel of crude fell to $42.63. Gas prices dropped 11 cents a gallon, suggesting the recent rise in wholesale prices could slow or even reverse.
Tom Kloza, an oil analyst at Oil Price Information Service, said the sharp decline should drop wholesale prices as much as 15 cents.
Kloza predicted gas prices will eventually rise in the Buffalo Niagara region over the first eight months of the year to between $2 and $2.25 a gallon.
“We’ll be considerably below the peaks of the last two years,” Kloza said. “We’re not going back to the apocalyptic numbers we saw of $3 or $4 a gallon.
Wednesday, New York State’s gas prices were sixth-highest in the continental United States. California, at $1.91, was most expensive, while Wyoming, at $1.42, was the cheapest. The Great Lakes region, at $1.85, the same as the Buffalo Niagara region, was second in cost only to the Pacific Northwest.
Gas stations in the Buffalo Niagara region, on average, charged five cents more than in Syracuse, down from a 19-cent difference nearly a month earlier. Stations were charging four cents more than Albany, rather than the 17 cents it had been, and three cents higher than Rochester, down from a 10-cent difference.
The cheapest gas was at Kwik Fill, 2212 Niagara St., where the price at the pump was $1.76. Some Delta Sonics also were at that price with the purchase of a car wash.
Richard Lang, supervisor of the Delta Sonic at McKinley Parkway and Bailey Avenue in South Buffalo, said the company wants to be priced lowest to bring people into their store and to purchase car washes.
“We survey two to three miles of our location, and when our competitors move, we move,” Lang said.
Rep. Brian Higgins, D-Buffalo, said Wednesday that the Federal Trade Commission and the New York State attorney general’s office are now working together to investigate the disparity in gas prices between Western New York and other regions in the state.
Higgins pressed the FTC to begin looking into the matter, which it agreed to do in October.
“While I am pleased that gas prices in Western New York dropped significantly in the last several weeks, we need to keep moving forward from hollow arguments of the past, such as the layout of the pipeline system or location of refineries, and keep fighting to ensure that prices in our region are equitable,” Higgins said in a statement.
msommer@buffnews.com and lmichel@buffnews.com
Log into MyBuffalo to post a comment
MyBuffalo is the new social network from Buffalo.com. Your MyBuffalo account lets you comment on and rate stories at buffalonews.com. You can also head over to mybuffalo.com to share your blog posts, stories, photos, and videos with the community. Join now or learn more.
Reader comments