Wednesday, Aug. 20, 2008

Falling gas prices don't ease pain at the pump

Some downcounty motorists buy gas where it's cheaper: the upcounty

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Drivers upcounty are paying much less for gas compared to those elsewhere in Montgomery County for reasons that are disputed by the federal government, gas station owners and advocates for motorists.

A motorist could pay up to 40 cents a gallon more for gas in Bethesda than in Germanton, according to the fuel price finder on the AAA Web site. It recorded an average gas price of $3.719 per gallon on Tuesday afternoon in Germantown and surrounding upcounty areas. In Bethesda and surrounding communities, the average price was $3.848.

The highest price was $4.099 a gallon at a station on Old Georgetown Road in Bethesda. The lowest price in Germantown was $3.659 recorded at eight stations.

"I work around the [National Institutes of Health]and it's really, really expensive. It's amazing, some of the prices," said Amalia Odar as she filled up her car at the Crystal Rock Exxon in Germantown Saturday.

Odar said she needed gas when she left work that morning but waited until she reached a gas station near her residence in Germantown before filling up.

Robert Maij of Germantown said he tries to shop around for the station with the cheapest gas, despite the slight price drop during the last month. He was filling up at the BP station on Aircraft Drive in Germantown, but he said he often goes to Free State about a mile away on Frederick Road for its lower prices. He has also noticed price differences between upcounty and downcounty stations.

"I would actually drive out of Chevy Chase … on an empty tank of gas not to pay for any gas that's there," Mait said.

State Comptroller Peter V. R. Franchot launched an investigation in the spring after noticing the disparity gas prices among communities around the state.

"With the cost of everything from gas to milk rising, Comptroller Franchot wants to make sure if the cost of gas is higher in one area than another, that it is not discriminatory and that it is based on sound economic and business factors," said Joseph Shapiro, a spokesman for Franchot.

Franchot received responses from all five major oil companies when he asked them for explanations about the differences in local prices, Shapiro said. He came away dissatisfied with the vagueness of their replies and is working on another strategy to obtain the information he is looking for, Shapiro said.

"It probably is zone pricing," said Mahlon G. Anderson, AAA MidAtlantic's director of government and public relations. "We never know what goes into zone pricing and you wouldn't know, either. It's the black box of the industry."

The federal Energy Information Administration cites traffic patterns, the cost of renting land and different sources of supply as the major factors affecting prices.

The economic considerations influencing local differences in gas prices are more complicated than the federal government's explanation, said Paul Fiore, director of government affairs for the Washington, Maryland, Delaware Service Station and Automobile Repair Association.

He said gas station owners are victimized by zone pricing, too.

At a typical gas station, the owner buys gasoline and pays rent to the same company. Oil companies have been retreating from retail sales over the last decade and selling their stations to gasoline distributorships, Fiore said. The result has been a squeeze on the share of revenue gas station owners can keep for themselves, he said.