Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

As oil prices crash, residents question high pump prices

 

April 30, 2020



Oil prices began to plummet in mid-February due to the COVID-19 worldwide pandemic and economic downturn and bottomed out around April 21. Haines gas prices are still higher than most communities across the region, which has befuddled some Haines residents.

“A barrel of oil costs 12 bucks, but not if you go to Delta Western,” Fred Shields quipped this week.

Mark Sebens questioned when prices are going to come down “to a reasonable amount.”

“It’s difficult to reconcile the concept of fuel down south being under a dollar in places, and in the two-dollar range in other parts of Southeast Alaska and we’re almost four dollars here in Haines with no signs of movement. I just want to know why,” Sebens said.

On Monday, unleaded fuel prices in Haines ranged from $3.89 per gallon at the Tesoro station on Second Avenue, to $3.62 at the Main Street Tesoro station and $3.57 at Bigfoot.

In Skagway, unleaded cost $3.40 per gallon at Family Fuel and $3.25 if paying with cash. Petersburg Motors charged $2.95 per gallon and at the Alpine Mini Mart in Wrangell, a gallon of gas cost $2.99. Those stations are supplied by Petro Marine.

Delta Western Tesoro manager Fred Gray said he can’t comment on gas prices and referred the CVN to an advertisement placed by Delta Western in the March 26 issue, and to the president of the company. A company spokesperson also declined to comment, and referred the CVN to the same advertisement in the March 26 paper.

“We are aware of news media reports of .99/gal gasoline,” the March 26 advertisement states. “However, Seattle fuel prices still range $3.20 to $3.50. We have not seen any price changes from oil supply companies in Southeast per our survey today.”

Delta Western’s supply comes from the Pacific Northwest, Washington and Canada. Delta buys fuel in large quantities and sells at the original price they buy at. Gray said Tuesday that a barge arrived earlier this month and gas prices dropped at that time.

The price of crude oil dropped and bottomed out around April 21 at around $19 per barrel, said Gas Buddy petroleum analysis Patrick De Haan. Haines last barge was on April 8, when the price of crude was around $42 per barrel.

De Haan said wholesale gas prices are highly variable across the country, but that some gas stations “are taking a proactive community standpoint of helping their customers by lowering prices, but it seems like in (Haines’) situation there’s a fairly dramatic difference in prices and I would surmise a lot of it is a lack of competition.”

Delta Western is the sole supplier in Haines.

De Haan said demand for gasoline in Haines might be lower given recent health restrictions on travel and movement, which could also cause prices to remain high.

“Demand might be lower at these stations simply because they’re selling far less gasoline,” De Haan said. “Perhaps they can offset the drop in demand by having a slightly higher price.”

A local service station representative said that his station has sold about 2,300 fewer gallons of gas in April than in January. “That’s a pretty big decline,” he said. “For this time of year, you’d think it would be going up.”

He said that the price of gas dropped about 30 cents a gallon on April 17. He said the supplier he spoke to said they still had 450,000 gallons of fuel that was purchased when prices were higher. “They had a high supply of fuel when the fuel was at a higher price,” he said. “They’re hanging onto it as a long as they can at a higher price.”

 
 

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