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Why are gas prices higher here?

Prices locally are far higher than in most area towns.
“I’m hearing it, too,” said Spencer Thomas, brand manager for Southwest Georgia Oil, parent company of S&S, which operates the most gas stations in Columbia County. “I hear it all the time. Our customers are mad. They’re furious.”

Buying gas in Gainesville wasn’t worth it when Bonnie Penner went to the University of Florida about 25 years ago. Instead, she always waited until she gothome to Lake City, where fuel was cheaper. How the times havechanged.

“It’s flip-flopped,” said Penner, finance director for the Columbia CountySchool Board. “It’s just so strange.”

Stations in surrounding counties are typically selling gas for 30 or 40 cents per gallon cheaper than stores here. As of Friday afternoon, several local stations were charging 60 cents more per gallon than some of the cheapest options in Jacksonville.

In Lake City on Saturday,all but a handful of stations were pegged at $2.59 agallon. One was $2.56 and one by I-75 was $2.64. In Gainesville the same day prices ranged from $2.18 to around $2.30.

The fact that gas is significantly higher here than neighboring counties has been a sore spot in recent weeks for local residents, who complain about the disparity with their neighbors elsewhere in the region.

“I’m hearing it, too,” said Spencer Thomas, brand manager for Southwest Georgia Oil, parent company of S&S, which operates the most gas stations in Columbia County. “I hear it all the time. Our customers are mad. They’re furious.”

Taxes are a popular target to blame. In face-to-face and social media conversations, local residents have assumed county and city governments are responsible for causing costs to rise.

“There are a lot of rumors that Columbia County has the highest gas tax in the state, and that’s just untrue,” said County Manager Ben Scott. “So why is our gas so high in Columbia County? I can’t explain that, but it is definitely not because of taxes.”

Many counties have both higher gas taxes and cheaper gas prices. Not counting state taxes, Alachua County taxes gas at a rate of 12 cents per gallon — the maximum allowed under the state’s taxing structure — yet gas is generally at least 30 to 40 cents cheaper per gallon than Columbia County, which taxes gas at 7 cents per gallon. The City of Lake City does not tax gasoline at all.

“That’s something I’m frustrated about, too, it’s not just the customers,” Thomas said “We don’t like high gas prices either, I understand our consumers and what they’re going through.”

Thomas said market forces determine prices.

“Right now, we’re just trying to follow the market,” Thomas said. Southwest Georgia Oil owns 77 stores in Florida, Georgia and Alabama, including locations in bigger markets such as Gainesville and in less competitive ones such as Lake City, Thomas said.
Gainesville, Jacksonville and similar cities have attracted more companies, which end up driving the prices down as they jockey for market share, Thomas said.

There is no such downward pressure in Lake City or Live Oak, which has comparable gas prices, Thomas said.

“Look at other market leaders — we base our prices on what they are doing,” Thomas said. “If you look at the other competition in this area, you’ll see we’re in line with where we need to be.”

Thomas said Southwest Georgia Oil purchases gas from two terminals — one in Jacksonville and one in Bainbridge, Georgia.

Every time Thomas’ company refuels, it has to factor in the current price of fuel at each terminal and which is cheaper — and whether the hauling costs and other operational expenses are going to be more expensive at one compared to the other.

The Bainbridge terminaL had to shut down in the wake of Hurricane Michael, Thomas said.

“That jacked up prices,” he said.

In Gainesville, Jacksonville and comparable markets, Southwest Georgia Oil has no choice but to follow the competition when it sets prices at stores, he said.

“Sometimes it’s us having to eat the cost of that,” Thomas said. “We’d be stranded out to dry if we didn’t.”

Marshall Beck, marketing director for Busy Bee, said that is why his company doesn’t operate stores inAlachua County.

“In Alachua, there’s probably a gas war there,” Beck said. “You’ve got the big boys there that’s fighting one another.”

Busy Bee has locations in Columbia, Hamilton and Suwannee counties. Beck said stores have to charge high prices certain times of the year to offset leaner months that saw negative or small profits.

“If we can’t, all the gas stations are going to shut down,” he said. “People don’t ever complain when the gas is cheap.”

Columbia County, Lake City and the Columbia County School Board have government contracts that insulate them from local market fluctuations, so taxpayer- funded budgets don’t stand to be affected by the current high rates.

The School Board has a contract with fuel wholesaler G.W. Hunter that locks it into a certain markup above whatever the cost is when crude oil comes into the port of Jacksonville, Penner said.

“What the local distributors determine to charge, we’re not held to that,” Penner said.

The county and city’s contracts are structured the same way.

County Attorney Joel Foreman anticipates county commissioners will weigh in on the high gas prices here in the near future.

The board will likely raise the issue soon and ask if there is any action it can take to address residents’frustration, Foreman said.

“I’m preparing for those questions, researching the options,” he said.

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