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Why are gas prices so high in Charlotte?



Gas is flowing from Charlotte pumps, but prices are among the highest in the nation.

As of Friday, the national average for a gallon of regular unleaded was $3.04, a 82-cent drop from a month ago. North Carolina easily topped that with $3.26 per gallon, and Charlotte was even more: $3.30 per gallon. Meanwhile, our neighbor to the south averages $2.98 per gallon.

Why, if supply is there, and the price of oil has dropped, are Charlotteans still feeling pain at the pump?

It would seem that prices would fall, since the price of oil is now $75 a barrel. But it hasn't, and Charlotte drivers are wondering why, even as they've grown accustomed to the increase. "I'm so used to paying these high prices that I've gotten used to it. I just fill up and roll," said Lamonte Brown, whose Ford Explorer, is hardly a gas saver.

Colonial Pipeline, the company that handles much of the flow of the gas into the Southeast, says gas is flowing at the same rate as it was before hurricanes Gustav and Ike hit the Gulf Coast refining region. The system has the capacity to pump 100 million gallons of gas each day throughout the southeast. For about the last two weeks, in fact, the company has been pumping more product than before, spokesman Steve Baker said. "We deliver whatever our customers have asked for," he said.

Charlotte depends on Colonial Pipeline to deliver 85 percent of its gasoline supply. While there are costs -- an estimated two- to three-cents per gallon -- associated with getting gas from the refinery to the pump, Colonial doesn't set retail prices, Baker said.

If it's so cheap to get the gas here, why is it so expensive to get it from the pumps to your car? Several reasons, including hurricane hangover, said AAA of the Carolina's spokeswoman Carol Gifford: "We're still getting in supply, but not at the level that we had been before the hurricane and all of the subsequent events."

And when gas wasn't available from the pipeline and retailers were bringing supply in from alternative sources -- tankers from ports or by convoys from tankers from the Northeast or the Midwest, it cost retailers extra, Gifford said.

"They were probably going to make up that money somewhere, so gasoline prices are higher than in some areas that didn't experience the shortages that we did," she said.

Brandon Wright, a spokesman with the Petroleum Marketers Association of America, said retailers want to pass lower prices on to consumers. But dealing with the hurricanes and hurricane-inflated prices of crude oil made that difficult.

"The price at the pump is really set by crude prices. What we've seen is that wholesale prices have come down and retailers have been able to pass that lower price on to consumers. Retailers are certainly reluctant to raise the price on consumers at the pump," he said.

Wright mentioned that the money generated at the gas pumps doesn't go directly to retailers. Credit card transaction fees, as well as specific blends of gas sold in different regions, can impact price as well.

Some retailers, he said, pass along the few cents that credit card companies charge them to process the credit transaction to the consumer. "Gas retailers have a small margin of profit," Wright said.

Gifford said not finding every grade of gasoline is still pretty common in Charlotte. A Circle K on South Boulevard advertised regular unleaded gas for $3.19 per gallon, but the cashier said the store only had premium grade gas, which sold for $3.39.

Last month, Charlotte faced serious shortages in finding gas. Lines at gas stations were at times 50 cars deep and there were some disturbances reported at some stations as tempers flared.

Gifford projects prices will continue to drop. "What we are expecting is that we will continue to follow the trend of prices going down," she said. "We've seen that happen pretty rapidly in the Carolinas. Because we were at a higher price level than other states, we still have a ways to go."

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