Kadner: Baldermann’s gas price war wins hearts of motorists
Phil Kadner pkadner@southtownstar.com | (708) 633-6787 April 26, 2012 10:22PM
Tim Baldermann
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Updated: May 28, 2012 9:06AM
Motorists are bewildered by gasoline prices.
When New Lenox Mayor Tim Baldermann urged his residents this week to boycott local gas stations, he struck a nerve with people throughout the Southland.
In response to Thursday’s column about Baldermann’s boycott, I’ve received telephone calls from readers, all in support of the mayor’s action. The callers all have the same message — it’s about time someone in public life stood up for motorists.
When I point out that consumers always have been free to shop for the best gas price and boycott stations that charge more, readers say they’re frustrated by a pricing process that doesn’t seem to make much sense.
Bill Fleischli, executive vice president of the Illinois Petroleum Marketing Association, told me that the public just doesn’t understand all the variables involved in gas pricing.
“We’re the only people who publicly post the prices of our product every day,” Fleischli said. “You won’t see that sort of thing for hamburgers, cakes, pants, movie tickets. Nobody else does it. Nobody!”
And the fact that people can watch the prices go up and down on a daily basis leads to their frustration, he said.
Fleischli said many, if not most, gas stations don’t make a lot of money off the gas they sell. Some lower the price of gas to lure drivers and also get them to stop at their convenience stores, which have a higher profit margin.
“The cost of labor in an area can impact the cost of gas,” he said. “Sales taxes. Taxes on underground drums. Property taxes.
“If the mayor of New Lenox has a problem with the price of gas in his town, maybe he should look at the cost of doing business in his town,” Fleischli said.
Baldermann dismissed that, telling me he looked at taxes in New Lenox compared to Frankfort, Joliet and Tinley Park and didn’t see a difference of 20 cents per gallon. He said gas in neighboring towns is often that much cheaper than in New Lenox.
On Thursday, a woman told me she recently saw a 40-cent price difference between gas stations near Matteson and was so upset that she went inside the higher-priced station to demand an explanation.
“They didn’t even respond,” she said. “They just looked at me.”
My guess is that the employees who work at the stations don’t understand what’s going on.
There was a time, not long ago, when it was common to see a price difference of 1 to 5 cents between gas stations within a community or neighboring suburbs. But the price differential seems to have increased dramatically in recent weeks.
I bought gas at a Costco last week for $3.97 a gallon. Costco often prices its gas lower than other distributors, but on that day it was 20 cents lower than the station where I often purchase gas.
Fleischli said gas station owners often find themselves playing a futures game of sorts.
“They change their product about every three days,” he said. “A load of gasoline is maybe 8,000 gallons and when the price goes up $4,000, as it recently did, the owner has to not only pay for the gas he has but anticipate the price jump so he can pay for the next load.
“If he doesn’t do that, he won’t stay in business much longer.”
I understand there are a lot of variables involved, including refining and transportation costs and the impact of speculation on the oil market.
But that still doesn’t explain the Baldermann conundrum. Why should the price of gas vary widely from one suburb to another if the taxes are nearly the same?
Although the market for oil is international in scope, local gas stations often price their product based on what the guy down the street is charging. That’s what Baldermann was told by Speedway’s corporate headquarters.
Fleischli has a point about consumers not being as aware of price fluctuations in other products. Maybe we would all be more outraged if the price of milk, butter or eggs were posted on a daily basis outside grocery stores.
There might be heart attacks if hospitals posted price signs outside their buildings. Emergency Room Visit: $4,999.99. That wouldn’t include the cost of a doctor, X-rays or lab tests, of course.
Like most of you, I keep reading about the cost of oil and the price of gas, and I always get the feeling I’m being conned.
Baldermann’s stand on behalf of New Lenox residents has struck a chord with motorists who feel their public officials don’t feel their pain.
Whether or not he drives gas prices down for his residents, at least someone is saying, “No more.”
