“We are not price gouging, we are trying to cover costs under the government’s coronavirus declaration rules.”
That’s the reaction from one of the main gas station operators to reports that they’ve raised the price of gasoline even though there’s been no increase in the Maximum Allowable Price (MAP) for fuel.
Toa Scanlan of Morris Scanlan Service Station in Utulei said they are following the (MAP) but they’ve had to increase their markup to meet costs.
He said gas stations are a 24- hour operation in case of any emergency or natural disaster, so they have to pay a person to watch the gas station at night. Under the emergency declaration they stop selling at 6 pm.
“So were paying a person 12 hours basically to do nothing, and we can’t sell during that time,” he said.
He told KHJ News business has been down 50% since the 6 pm cut off time for businesses. Because schools are out, and people are not traveling as much, beaches and parks are closed, and public transportation have limited hours of operation, the demand for gas has dropped.
“There are fewer buses and taxis on the road so we’re not selling as much,” said Scanlan.
He believes some of the buses have stopped running because it’s not economical and they don’t want to risk being arrested because they’re carrying more than the allowable number of passengers.
According to Scanlan, their mark up from the MAP is 4% so they’re not guilty of the price gouging law which prohibits an increase in price of 10% during an emergency.
Another gas station owner who did not wish to be named, provided a snap shot of all the costs they have to pay, by the time they pump gas into your fuel tank.
“Yes, the price of crude oil has dropped but that cost is BEFORE all the “parties” take their cut in processing the crude oil to gas.
“For example: Crude oil goes from the refinery, to the wholesaler, to the supplier, to the gas company who pays for shipping to AS, delivery, drivers, ASG tank farm fees, ASG excise tax, ASG 2% gas tax to support DOE, etc.
The owner said all these companies have to pay for people to process and deliver gas to the next destination.
“So all these costs are added to the price of gas before it is sold to the gas station – the bottom of the totem pole,” said the gas station owner. “It is not easy nor cheap to ship gas to AS.”
At the retail point, gas stations add in their percentage to provide this product to the consumer as they too have overhead, which includes the cost of gas, payroll, utilities, maintenance, etc.
According to the owner, gas stations have kept their prices down all these years to fit in with our economy, cost of living and minimal wages.
Another added cost is that people are using credit cards and debit cards more to pay for gas. “Gas stations have been paying the bank’s astronomical fees in order to continue providing this service to the community.”
The gas station owner said, “Perhaps if ASG would reduce or eliminate some of their fees, we would see a drop in price at the gas stations. It would require constituents to pressure their representatives and senators to move for better changes that are beneficial to all.”
