Why does gas cost more in Vail Valley?
Vail, CO Colorado
VAIL, Colorado “When it comes to gas prices, residents in Colorado’s high country will be the first to admit they feel cheated, paying significantly more at the pump in the Vail Valley and in Summit County than they see in Denver.
To get to the root of the problem, local elected officials invited members of the Colorado Petroleum Marketers Association to the Dillon Town Hall to explain the process behind the pricing.
“Residents have always been concerned about the gas prices in Summit County, and those concerns have been exasperated by the current economy,” said state Rep. Christine Scanlan, a Democrat whose district includes Eagle County.
“I feel like I have never seen us within a nickel of the prices in Denver. … Not everyone understands why gas would be that much more expensive,” Scanlan said at Monday’s meeting.
Tackling what can sometimes become a volatile topic for many locals, Bill Gallagher with the Petroleum Marketers Association explained that there are numerous factors that contribute to high prices.
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“No one except the oil and gas companies, Wall Street and credit-card companies benefited from the recent spike in prices,” Gallagher said. “And while Colorado prices are traditionally lower than the national average, I understand that that is not always the case here in the high country.”
Gallagher went on to explain that while added federal and state taxes are felt nationwide, high country gas retailers have the added burden of paying a freight cost, which can add as much as to five cents a gallon.
Although some who attended the meeting contested that freight costs were nothing more than a worn-out excuse, Gallagher added that it typically costs about $400 per truckload to transport up to Summit County.
“When you consider the cost of the time and the driver, $400 is the value needed to get a return on what it takes to come over the hill,” Gallagher said.
The added cost of doing business in the mountains is another contributor to high gas prices, and it was pointed out that rent at a gas station in Breckenridge was close to $15,000 a month. An identical facility in Denver pays $4,400 a month for rent.
Gas retailers in the High County also have higher starting wages than down on the Front Range, as clerks and managers in Summit County typically make $2 to $4 more in the mountains than gas employees in Denver.
Gallagher also spoke at length about two additional cost contributors that drivers don’t usually consider: Credit-card fees and cold-weather shrinkage.
“Credit-card fees are a hidden cost to all of us,” Gallagher said, adding that 75 percent of gas sales include credit cards. “Last year, A-B Petroleum paid $1,162,00 in credit card fees. …Those fees are fast becoming a huge burden for retailers.”
Gas retailers in the mountains also have to account for shrinkage when tanks are delivered. As a liquid, gas is delivered to local stations hot, but as it cools, the gas decreases in volume.
“In the winter, retailers lose hundreds of gallons a month,” Gallagher said. “Some is even lost in transit if the truck is traveling in very cold weather.”
Lack of competition within the county is another factor in how individual retailers set their prices, and Scanlan admitted that since Eagle and Summit counties are communities that rely on tourism, “the market will continue to bear the prices.”
Ashley Dickson can be reached at (970) 668-4629, or at email@example.com.