Commonwealth Journal

Local News

October 24, 2013

Council rethinking praise for gas prices

(Continued)

Somerset —

“It is common for each of the marketers to access what their competition is doing on a daily or more frequent basis and some may do this by driving around to see what others are pricing fuel at,” Griffith said. “Hence, why you see the different prices as it is all driven by this local competition. Each marketer will then decide if they want to make a change to their price or not.”
Tim McGurk, with public affairs for the Kroger Mid South Division, corroborated Griffith’s statement’s about how local gas providers operate.
“Our Somerset store teams visit the other gas retailers twice per day to compare prices,” McGurk wrote in an email to a CJ reporter. “We never lead prices up in Somerset, we simply make sure that we are priced competitively in the market.”
A majority of regular Kroger customers have “Kroger Plus” cards, and they often receive a discount of a minimum of 3 cents off the street price of gasoline per gallon, which automatically puts Kroger’s stations a few cents below other local providers. Those discounts can even get as high as 10 cents off per gallon, depending on points accumulated through shopping. 
But that aside, city officials are saying that local competition is sorely lacking. 
“When’s the last time we actually got a deal on gasoline, when one used its competitive advantage to get a sale?” asked Girdler. 
“We have no competition in this town, true competition,” said Councilor Jim Rutherford. “Where people want to treat a customer right at a decent price ... These places are like ‘You know what, we’re okay where we are and we just won’t compete with each other.’”
Minton said he received a flood of phone calls from constituents when the gas prices jumped after they held steady for several weeks. Minton said he’s been told that many gas station operators receive a phone call daily from suppliers on where to set prices. Minton suggested that those phone calls count as collusion, which is defined as secret agreement of cooperation between parties (usually businesses), especially for an illegal purpose.

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