Motorists wonder why LV fuel costs vary from block to block

Jace Radke

Friday, April 21, 2000 | 11:24 a.m.

A few blocks can equal more than a few cents when it comes to Las Vegas Valley gas stations.

Drive down any city street and it's hard to miss the tall obelisk-like signs broadcasting a variety of gasoline prices that seem to change based on some strange geographical formula.

There isn't some super-secret set of clues that can lead to an understanding of the ever-changing prices, but frustration is a common reaction from consumers as they motor down the road, said Jack Greco, a local gas station operator and longtime director of the Nevada Gasoline Retailers Association.

"I don't blame drivers for wondering why the gas prices are different from block to block," Greco said. "The consumers are just driving from point A to point B and tend to equate the prices, and question why they aren't the same."

The easy answer would be that there are different brands that carry different costs. For example, Texaco gasoline generally costs more than Arco.

But what happens when it's the same brand but a different price?

At the Meadows Lane and Decatur Boulevard Texaco gasoline costs 13 cents more than at the Texaco at Windmill Lane and Pecos Road.

A gallon of 87 octane at Meadows and Decatur is $1.85, while at Windmill and Pecos motorists can fill up at $1.72 a gallon.

Price zoning by oil companies, competition and traffic patterns all play a part in the disparity in prices from one pump to another, AAA Nevada spokesman Paul Moreno said.

"The oil companies are going to charge as much as the local market will bear," Moreno said. "They take into account traffic volume and the proximity of other stations, and at a certain point they say, 'this is the the greatest amount the area can bear.' "

Price zones occur when oil companies decide how much consumers in a certain part of town are willing to pay for gasoline, Moreno said.

"Maybe there is a cluster of stations off a freeway that will probably charge a little more than a station a few blocks away because of the traffic generated by the freeway," Moreno said. "Or on the Strip you'd expect to pay more because the stations are looking for tourists who might not know that a few blocks away gas can be had at a cheaper price."

Price zones aren't hatched in dark, smoky rooms with representatives of the oil companies colluding, Greco said.

"They don't need to. They can just look at the signs and see what everyone else is charging," Greco said. "Arco's old price zones were divided north and south by Sahara, and east and west at the railroad tracks, and they also had a Boulder City-Henderson zone."

In most parts of Las Vegas motorists can expect to pay anywhere from $1.70 to $1.82 for a gallon of 87 octane, depending on what brand or dealer they buy from. There are some exceptions such as the $1.63 price at Costco for members of the warehouse store, and the $1.99 price at the 76 station located just north of the Monte Carlo on the Strip.

Near the Lakes and Peccole Ranch consumers are paying between $1.73 and $1.81 for a gallon of 87 octane, while on Lake Mead Drive in Henderson the same stations are charging between $1.75 and $1.81.

Where Boulder Highway meets Desert Inn Road and Lamb Boulevard motorists have a choice of a station at each corner all selling all three octanes of gasoline (87, 89 and 92) at different prices. For premium 92 octane drivers pay $1.95 at the Arco, $1.94 at the Citgo, $1.99 at the Chevron and $2.13 at the Texaco.

Arco spokesman Paul Langland said price fluctuations from station to station, and even among stations selling the same brands occur because of competition among the dealers that own the franchises.

"The dealers set the prices, and the major factor they have to look at is the amount of competition around them," Langland said.

There are hundreds of different retailers with hundreds of different pricing ideas, as well as different locations with higher and lower property taxes that also influence prices.

Greco said he knows that dealers set the prices, but he hopes that consumers understand that the price they pay is also influenced by price zoning and what the oil companies decide to charge the station owners for the gasoline.

"Arco is charging 10 cents more a gallon for the gas they send out to the station owner in Boulder City," Greco said. "All the gas in the valley comes through the Las Vegas terminal pipeline out near Nellis Air Force Base, and the gas companies pay the same for the gas, but they don't sell it to the dealers at a fixed price.

"It would be better for the consumer if the dealers all got the gas at the same price because we're vicious, mean and lean anyway, and that would result in more competition and lower prices."

Recently the gasoline Greco buys from Arco has cost him about $1.62 a gallon including taxes, while Boulder City Arco station owner Arnold Brown pays around $1.72 a gallon. Greco marks his gas up to $1.65 or $1.67, while Brown is selling at $1.79.

"It's cheaper for me right now to get a tanker and go to Las Vegas and fill up at Jack's or someone else's station than to get the gas from Arco," Brown said. "I've lost some of my sales volume because people can get gas cheaper where they work in Las Vegas. But I don't blame the people because it's tough all over and you have to go where you can get the best deal."

Langland said that although he didn't know the exact reason for the difference in the charge between Brown's and Greco's gasoline, he thinks it probably has to do with the extra distance to Boulder City and a less competitive, smaller market that allows for higher prices.

Brown doesn't buy the argument that the drive from North Las Vegas to Boulder City costs an extra 10 cents a gallon, and estimates its closer to a half cent a gallon.

"All I know is that people should be entitled to affordable gas near their homes and where they work," Brown said. "My people here in Boulder City shouldn't have to pay what they are paying just because the station they live near is where it is."

Jace Radke is a reporter for the Sun. He can be reached at (702) 259-2318 or by e-mail at jace@lasvegassun.com