Lee — Select Board Chair Gordon Bailey had something to get off his chest towards the close of the group’s April 1 meeting: the pump price of gasoline in his town.
“I can’t help noticing the discrepancy of the price of gasoline in the town of Lee compared to everywhere else I go,” he said, adding that he has noticed the difference is as great as about 50 cents higher than in the Westfield area.
Bailey is considering putting the issue on a future Select Board agenda and questioned whether higher delivery fees or the town’s location adjacent to a major state highway is responsible for the ramped-up petroleum charges.
“I just think it’s unreasonable for full-time residents in this town to have to pay so much more a gallon for gasoline, whereas you drive 30 miles away and you can get it for anywhere from 20 to 50 cents cheaper [per gallon],” he said.
In a telephone interview with The Berkshire Edge, American Automobile Association (AAA) Northeast Senior Spokesperson Mark Schieldrop offered possible answers to Bailey’s concerns and confirmed that “Lee is on the higher end of the [gasoline charge] spectrum.”
The motorist organization tracks charges at most of the fuel stations in the country on a state-by-state basis.
On April 2, gasoline in Lee was priced as the 33rd most expensive in the Commonwealth out of 391 towns, or the state’s top eight percent, Schieldrop said. The average price of gasoline in Lee on that day was $3.21 per gallon.
“Oil and gas markets are really, really complicated,” Schieldrop said. “Most people’s familiarity with it is that price they see on the sign, especially if somebody is used to seeing a price in their hometown and then they head out a little bit and see prices below that. It certainly begs the question, ‘Why are prices higher in this town.’”
For Schieldrop, the elevated cost of gasoline in the area was not a surprise as western Massachusetts boasts higher fuel prices in general than the rest of the state because the region is more remote than its eastern side that is closer to where the fuel used by residents emanates.
Who decides what price to charge for gasoline? The retailer, Schieldrop said, and that price is based on the wholesale price paid by the retailer, with day-to-day fluctuations.
Cape Cod and islands in eastern Massachusetts claim the highest gas prices in the state, including Oak Bluffs in Martha’s Vineyard that averaged $4.29 per gallon of gasoline on April 1. That fuel is transported by shipping, contributing to its high cost. The cheapest fuel prices in Massachusetts tend to be along the border towns such as Seekonk and Rehoboth, places where a greater number of discount retailers, such as Costco, are selling gas.
More rural areas tend to have higher gasoline prices, Schieldrop said, because there is less volume of gasoline sales, “so that fuel is sitting in the tank a bit longer so they’re not getting the benefit of the higher volumes where they can take a little bit of a smaller margin and then make up for it on volume.”
Lately, prices have inched up, Schieldrop said, in anticipation of the summer travel season and due to a “summer blend” that makes gasoline more costly in the warmer months. On April 1, fuel terminals—where large tanker trucks fill up before depositing that fuel at local gas stations—transitioned from a winter blend to a summer blend that is more expensive for refineries to produce.
On April 2, AAA tracked eight gas stations in Lee used to arrive at that day’s average gasoline price of $3.21 per gallon of basic unleaded, with Gardner having the same average compared to Manchester at $3.20 and Brookline at $3.19. Communities with fewer fuel stations or those in the Boston Metro area see higher gasoline prices.
“There’s a lot of variables at play,” Schieldrop said.
A day ago, according to AAA, Lenox posted an average gasoline price per gallon of $3.04 (tracking two stations), Great Barrington posted $2.99 per gallon (tracking five stations), Stockbridge posted $3.19 per gallon (tracking one station), Pittsfield posted $3.04 per gallon (tracking 21 stations), and Sheffield posted $3.15 per gallon (tracking two stations). In northern Berkshire County, Adams posted an average of $3.01 per gallon (tracking four stations), North Adams posted $3.08 per gallon (tracking five stations), and Williamstown posted $3.06 per gallon (tracking three stations). Lee proved to have the highest average gasoline price at that time compared to the major municipalities within the county.
“In Stockbridge, there are fewer stations so there’s less competition, so that may have something to do with [pricing],” Schieldrop said. “Also, it depends on location. If some gas stations are right off a major exit, you can have one station that’s particularly high priced because they have a captive audience. People are driving on the Mass Pike, and they haven’t had an exit in a while, they’re running low, they go to the first gas station that they come upon, so those gas stations are going to tend to be higher priced.”
For a town with one gas station in the middle of its downtown area, that station will have a higher price for fuel “because they can,” he said. Some independently owned stations set their own prices while stations owned by larger investment groups or conglomerates that span across multiple states may dictate prices on a daily basis, reflective of a retailer looking at their profit margins spread among portions of a state or region.
Caroline Tufts pumped gasoline at Lee’s Main Street station on April 2, paying $3.23 per gallon for basic unleaded fuel. The Pittsfield resident commutes to Boston three times a week and said she was in a hurry. Although Tufts regularly fills her gas tank at two stations near her home that are known for lower prices, she pulled into the Lee station “for convenience,” not having time to buy her gasoline in Pittsfield. “You just have to know where to go and where not to go,” she said. “It’s all on the consumer.”
Situated right off the Massachusetts Turnpike and housing an outlet mall within its borders, Lee fits the definition of a town that might eye higher gas prices, Schieldrop said, given its through traffic and shopping destination that draws folks from around the area and even other regions. “The locals might shop around for the cheapest price, but somebody going to the outlet and then going home or coming off the Pike, they’re not going to be spending much time shopping around for the lowest price,” he said.
Demographics might also be a factor in gasoline prices, with higher prices seen in the more affluent towns of Newton or Wellesley in terms of per capita average annual income, Schieldrop said, adding that the average profit margin for fuel retailers currently ranges from 20 cents to 40 cents per gallon.
“Retailers know that people who live in the homes in the surrounding area tend to be less price conscious than in other areas where just a few pennies per gallon is a big difference for folks,” he said.
Schieldrop called the town of Lee “a little bit of an outlier” in the Berkshires.
“Those fuel stations don’t collude on prices, but they see the price that their competitors are putting on their board too,” he said. “Fuel stations tend not to lower prices until they feel like they’re losing market share. One station will lower their price a bit, and then the next thing you know is everyone is following suit because then they see ‘my volume is down about 10 percent week over week, where is everybody going?’ Then they can see down the road there’s a long line because it’s 10 cents cheaper.”
Mobil Oil Company representatives did not respond to requests for comment by press time.
