YORK - Local resident Ann Peterson travels to Eliot twice each workday to drive a school bus for the Marshwood school district; between trips she tends shop at the pet supply store she's just opened at Meadowbrook Plaza.
The trips put 65 miles a day, or 325 miles a week, on her car. This fall she parked her Ford Explorer, which gets 16 miles per gallon, and began commuting in a 1996 Nissan that gets 33.
And she buys her gas at BJ's Wholesale Club in Portsmouth, N.H.
Peterson is not unlike other drivers reacting to recent major hikes, nationwide, in the price of gasoline.
According to the U.S. government's Energy Information Administration (EIA), on Nov. 5 the price of a gallon of regular gas nationwide averaged $3.013, a figure up by 14.1 cents over the previous week, and up by 81.3 cents over the previous year.
For New England, the average was $2.969, up by 13.7 cents over the previous week, and up by 78 cents over the previous year.
Not quite one week later, on Nov. 10, the national average had climbed to $3.098.
In York, prices at the town's five gas stations have risen comparably, but with this distinction: they are all, in common perception, almost always at the higher end of others in surrounding towns.
On Nov.10, for example, when two of York's stations were pricing regular gas at $3.139 per gallon and three were pricing it at $3.099, the same grade gas was available in Eliot at $3.079; in Kittery at $2.979 or $3.049; in Ogunquit at $2.799, and in South Berwick at $2.999.
To be sure, those lower prices didn't prevail universally in each of those towns, and some stations were charging even more than were any in York - one Ogunquit station, for example, was charging $3.199 - but bargains were available elsewhere as they virtually never are in York.
What goes into gas pricing at local levels?
For retailers, there actually isn't a huge amount of wiggle-room after expenses. According to the EIA, when we buy a gallon of gas at the pump, 64 percent of what we're paying goes to the cost of the crude oil with which it starts (nationally and on average, and as of Sept. 2007), 13 percent goes to that oil's refinement, 9 percent goes to the transportation and marketing needed to get it to the pump and 14 percent goes to taxes. The local retailer then gets to decide what his own market will permit him for profit.
In that decision, other factors impinge. As the EIA puts it, "Some retail outlets are owned and operated by refiners, while others are independent businesses that purchase gasoline for resale to the public. The price on the pump reflects both the retailer's purchase cost for the product and the other costs of operating the service station. It also reflects local market conditions and factors, such as the desirability of the location and the marketing strategy of the owner."
Significantly, only one of York's five gas retailers - the one at Anthony's Food Shop - is locally owned and operated. Each of the other four is run from a distance and backed by other interests and holdings that are, in some cases, massive.
The Canada-based 83-year-old family-owned and privately-held Irving Oil, for example, which operates the station and convenience store at York Corner, employs over 7,000 people, maintains 800 retail sites, operates 13 marine terminals and funds a fleet of tractor-trailers that, in its own words, "serve wholesale, commercial and retail customers in Eastern Canada, Quebec, and New England." It operates its own refinery, and that refinery is Canada's largest. Irving's U.S. marketing operations are managed from offices in Portsmouth, N.H.
The gas station next door to Irving's at York Corner is owned by the Dead River Company, which began with the acquisition, from Bangor, of a chain of gas stations in northern and eastern Maine in 1936. It now describes itself as "one of the largest distributors of petroleum products in northern New England." It lists 27 outlets in Maine, eight in New Hampshire, and two in Vermont, and includes among its products "home heating oil, kerosene, diesel fuel, propane and gasoline," and, among its services, burner service and heating equipment installation.
Mr. Mike's Mobil station and convenience store, north of York Corner on Route 1, is part of a company 36 years old, headquartered in Leominster, Mass., and still expanding. Operating with, or as part of, the Peterborough Oil Company, Inc., it runs gas stations, gas stations with convenience stores and truck stops at 26 locations throughout New England - 13 in Massachusetts, 12 in New Hampshire and one - York's - in Maine. Peterborough provides Mobil, Citco, Sunoco or Texaco gasolines only, offers a fleet fueling program and describes itself as expert in gasoline and convenience-store marketing assistance.
Cumberland Farms, which began as a small dairy farm in Cumberland, R.I., pioneered in the establishment of convenience stores in New England, starting in 1939; in 1971, it began selling gasoline at its convenience stores, at the same time that it introduced the cost-savings concept of self-served gas. Cumberland Farms' petroleum interests were next significantly expanded in 1986 when the company purchased the northeast marketing and petroleum distributions assets of Chevron/Gulf, a move that gave it, in its own words, "542 Gulf-branded gas stations, trademark rights to the Gulf name, and supply contracts and franchises for Gulf gasoline wholesalers and retailers" plus "twenty terminals, including four deepwater ports plus equipment and a fleet of petroleum transport vehicles." Acquisitions since then have resulted in the firm's now owning some 200 Gulf-branded gas stations, 200 Exxon-branded gas stations and more than 600 Cumberland Farms stores that sell gasoline, as well as over 1,500 Gulf- and Exxon-branded stations run through a subsidiary, Gulf Oil L.P., plus a dozen Northeast gasoline terminals.
Obviously, companies with backing like these have latitude in determining the price they'll ask for gas in their facilities in York: control over refinery and transportation costs give an edge; multiple enterprises spread out over wide geographical areas make it possible to absorb losses when competitive gas pricing doesn't cover expenses.
And the changes wrought by the Cumberland Farms expansion help explain why gas is usually about two cents higher than its competitors' at one of York's stations: Dead River is the only one of the five that is not also a convenience store, but, though not a repair station, it remains what's called full-service.
In contrast to his big-corporation neighbors, Mark Graziano, owner at the single-site and independently-run Anthony's Food Shop, which sells Shell-branded gas, can be made or broken by the prices he sets there. Technically, he could charge as much as he wants for the gas he buys. In practice, high taxes on gas in Maine already have the price jacked up; requirements, environmentally-driven, that require him to buy his gas in Portland rather than, say, Boston, make it impossible to shave acquisition or transportation costs. The result: to remain competitive among his peers in York he must keep his gas prices actually low relative to his costs, and from that practice he makes little or no profit.
But Graziano thinks he's not alone in being in that position. "Nobody's making any money on gas in York now," he maintains.
And he gets some indirect confirmation of that from Colleen Karpinsky, a spokesperson for Irving Oil, interviewed by telephone on Nov. 9.
"Gas retailing is extremely competitive in any market," she said, in large part, she added, because its prices are always so visibly posted and its customers thus always highly informed.
Among the multiple factors that can affect gas pricing, she noted, are the price of crude oil, supply and demand at any given time and location, federal and local taxes, and, yes, competition.
Karpinsky could not or would not report on how Irving reaches a decision about what its gas prices in York will be on any given day, nor could she say at what corporate level that decision is made. She did say that it was not made at the retail, or store, level. On the issue of the influence of supply and demand, it is probable that some of York's distinct features - its proximity to the turnpike entrance, a growing population that balloons in summer, a relative affluence - influence decision-makers when it comes to setting gas prices.
To those who see affluence as the determining factor - maintaining that York residents are charged more simply because they can afford more - one answer is that it costs more (for real-estate, rents, insurance, et al.) to do business in an affluent community.
Certainly Ann Peterson's decision to buy her gas at a discount store in New Hampshire, where lower gas taxes make for lower gas prices, highlights one of York's clearest distinctions
Some gas buyers, it's been said, buy only enough gas in York to get them to the border.
