NewburyportNews.com, Newburyport, MA

July 20, 2013

More pain at the gas pump

As prices climb, locals pay higher than national average

BY ANGELJEAN CHIARAMIDA
STAFF WRITER

---- — Consumers should be used to it by now, but the sharp rise in the price of oil and gas in the past two weeks once again has drivers panicking at the pumps.

With the price of a gallon of regular up about 19 cents in the last week, right in the middle of the busiest driving season of the year, drivers are grumbling again. But there’s little to do other than pay higher prices or cut back on non-essential trips.

According to GasBuddy.com, the average price of a gallon of regular in Massachusetts yesterday was $3.73. Prices in Newburyport were a tad higher at $3.79 a gallon. Both state and local prices were higher than the average in the U.S., which was $3.68 a gallon. But all of it is up considerably from the same time last year, when gas averaged $3.55 a gallon in the state and $3.47 nationwide.

In nearby New Hampshire, Granite State drivers have it a little better, but not much. In Seabrook, four stations were sporting prices of $3.63 per gallon on Friday, up four cents since Monday, while across the state, gas was averaging $3.68 a gallon.

According to the Associated Press, what made prices shoot up this time is political tensions in Egypt, coupled with the increased demand for gas during the summer driving season.

Charlie Mabardy, owner of Mabardy Oil which has gas stations in both New Hampshire and Massachusetts, agrees with that theory.

“As soon as the trouble in Egypt took place, gas prices shot up 6 or 7 cents the next day,” Mabardy said. “But I”m also being told that there’s issues at the (gas) refineries.”

Egypt, although not one of the largest oil producers in the Middle East, controls the Suez Canal. The canal connects water transportation between the Red Sea and the Mediterranean Sea. Without it, tankers would be forced to travel all the way around Africa to get crude to the world’s major markets, a much longer and more expensive trip.

As far as the difference between gas prices between Massachusetts and New Hampshire, Mabardy said, the difference in the gas tax is partly responsible.

New Hampshire’s gasoline tax is 38 cents per gallon, which includes 18.4 cents federal tax, while Massachusetts gasoline tax currently is 41.9 cents per gallon, including federal tax. The situation for diesel fuel is similar, at 44 cents per gallon combined with federal diesel tax of 24.4 cents in the Granite State, and 47.9 cents in Massachusetts, including federal tax.

Mabardy, who owns stations in Salisbury and Amesbury as well as in Seabrook, said another factor affecting prices in Massachusetts is that the cost of doing business in New Hampshire is lower. Fees and licensing tends to run higher in Massachusetts, he said, which makes overhead go up for fuel providers, and that’s passed along to consumers.

The difference in prices between stations in the same state in part can be attributed to the amount of gas stations pump. On the whole, high volume stations pay less per gallon from distributors for gas, and that savings can also be passed on to consumers, in the very competitive gas market.

And the type of gas pumped also makes a difference, Mabardy said, known in the business as branded or unbranded gasoline.

“Branded gas, like Sunoco, Mobil, BP or Shell for instance, cost more to buy from distributors than unbranded gas,” Mabardy said. “It’s the same as at the grocery store: Market Basket mayonnaise costs less than Hellmann’s or Cains.”

Whatever the reason for higher prices, Mabardy hasn’t noticed sales decreasing because prices are going up. But, what has affected business, he said, is construction.

“People don’t like traffic, and when there’s construction, there’s traffic, like the construction in Seabrook right now. That’s when I see (sales) volume drop,” Mabardy said. “The same thing happened when there was construction on Route 110. I’m glad that’s over.”