Langley does agree with Toews about the heavy hand that zone pricing lays on gasoline markets. What keeps prices low in some areas, however, is a large number of independent stations, which the major companies have to compete with. According to Langley, local independents commonly get their gas from a “spot market” in Los Angeles, which is created by brokers buying up the surplus gas of refineries and “splash blending” a little ethanol into it. The process can bring the wholesale price for the independents down as much as 30 cents.
“What often happens,” Langley tells me, “is that a brand-name refinery like Unocal, Shell, Chevron will subsidize one of its dealers in a very competitive market like Ramona so that that dealer can underprice his gasoline, and they can use it to slowly strangle the independent guys to death.
“The message is that, if you, Mr. Independent Dealer, price your gas more than two cents below the nearest Arco, you will be disciplined. If you go too low, we are going to hurt you. You are vulnerable, and you better watch out. We’ve got the money to sell gas at what for you would be a ten-cents-a-gallon loss. Even Costco toes the line. If you go and look at an Arco and a Costco, the Costco will be two cents cheaper than the nearest Arco, unless there’s been a rapid price change. Sometimes you’ve got to give them a few hours to react.
“Arco maintains a price floor,” Langley continues, “and they can raise or lower that price floor at will. For Arco, which is a cash-only station, the enemy has always been these little unbranded independents, and they’d love to see them go. They just see them as ticks on the belly of the big-oil cash cow.”
Langley tells me that the Utility Consumers’ Action Network “used gas spotters for years,” even before launching fueltracker.com. When gasoline cost only $1.35 a gallon, the concern on local residents’ minds was that gas prices were 25 cents higher here than in Los Angeles. “Now, over the years, we’ve seen the gouge gap diminish to just over a few cents, which is pretty much accountable to what it costs to move the stuff through the pipeline,” says Langley.
Today, people want to use the Internet to find the best gas prices they can. By helping them do that, sandiegogasprices.com “has become a great commercial success,” says Langley. “Sandiegogasprices.com is not a nonprofit organization,” he explains. “And I’m troubled by some of the products that have been advertised on their website, such as fuel-saving devices. When people go to a cheap-gas website, it’s because they’re hurting financially. Then they see the advertisement for a pill that’s going to magically give them 40 miles per gallon.”
Such ads aren’t the only kind on the site. It also displays ads for credit-card companies — and even Nordstrom, which doesn’t seem to figure, given the site’s appeal to people who are supposedly in financial pain.
Strict financial limitations, however, do characterize the lifestyle of Dawn DuRall. She is a mother of three, and her husband is disabled. DuRall uses a minivan for errands, school pickups, and trips to the doctor. She also works full time in Point Loma. The DuRalls live in North Park. “I post prices on sandiegogasprices.com for gas stations along or near University Avenue in North Park and in Point Loma. But I’ve recently been using buses and the trolley to go to work. What I discovered when gas prices reached $3 a gallon was that it’s more economical to use public transit than drive our minivan. And we don’t have enough money right now to buy a more fuel-efficient car.”
DuRall uses the sandiegogasprices.com map to find the lowest prices she can before making a trip across town or even out of town. “For instance,” she tells me, “when we want to go to Los Angeles or Orange County, I don’t have to rely on gas just off the freeway in Tustin, where it’s real high, but can locate a station three or four blocks further away that’s more reasonable.”