8/24/07
Still riding the roller coaster
By STEPHEN H. SUTHERLAND - THE GAS MAN
We are still on the pricing roller coaster; up a lot, down a little. Recently we saw a few days of relief in the gasoline prices at the local retail outlets. The story for the past two weeks was the rack prices dropped quickly, then the stations slowly followed -- so slowly that when they finally got around to dropping their prices the rack prices had already spiked upward again. Once the trend is downward, it's hard to get someone to turn it around and go back up. When this happens the margins are lost.
Over the past week or more, Speedway has been trying to push the price to $3.099, but Mutual lagged behind slowing the increases. But the roller coaster did not stop there. Now that the stations are finally making upward movement, the rack price has dropped drastically again, restoring the larger retail margins which so far they are keeping.
My last column seems to have ruffled some feathers out there, with responses written in the newspaper and e-mailed to me.
For those who missed the last column, I discussed the fact that the governor and other agencies were using the Minnesota bridge disaster to make another run at raising gas taxes. I pointed out that the governor was misleading the people by saying our state ranked 33rd in the country for road taxes, when actually the state also charges an additional 6 percent sales tax to each gallon sold in Michigan. Not only does it charge the sales tax on the fuel, but also on the federal road taxes. My column in no way stated that this sales tax was being used to fix our roads. It merely listed the taxes attached to a gallon of gasoline sold here.
It was also accompanied by a chart that showed the taxes charged in each state using the same criteria.
One forum was authored by an employee of a major asphalt company, and I received an e-mail from a worker at one of our fine road commissions. Both have a financial interest in these taxes since they fund their jobs and both wanted to point out that not a cent of the sales taxes derived from gasoline are used to repair the roads. This was my point -- if the state used all the taxes that they charged on a gallon of gasoline to upgrade our roads and bridges, we would have no infrastructure problems. This is the same point our president made recently when asked if he would support an increase in the federal road tax.
In closing, please remember you do not have to stop driving, change your lifestyle or even spend money to reduce your fuel consumption. There are plenty of additives on the market that will increase your mileage by 10 percent to 20 percent, depending on your vehicle. Proper tire inflation and a tuned car will improve your mileage even more and put dollars back into your pocket while doing so.
Keep the questions and comments coming!
The GasMan -