Analysts say free market allows operators to set gasoline prices

Dale Decker is hoping the South Shore doesn't experience another weekend this winter like the one over the New Year's holiday - and not just because of the snow.

While the town was crowded, roads were closed and fuel trucks were unable to get to filling stations, the price of gasoline went up significantly in two days. Some say prices jumped at least a dime that weekend, then went back down significantly by Jan. 3.

The specific prices for that weekend could not immediately be varified.

"I didn't think they could go after them. I just think it's completely unethical," Decker told the Tahoe Daily Tribune Thursday. "It makes me want to go somewhere else (for fuel)."

Sarbjit Kang, owner of south Tahoe's Swiss Mart and American Gas, said that he raised his prices because he was unsure when he would get his next shipment of fuel.

"We didn't know when the trucks could make it here (to the South Shore). We've got to be able to pay our bills," Kang responded Sunday.

Regulatory officials doubt there would be any case involving alleged price gouging or antitrust violations.

The California Attorney General's Office has kept an investigation open since 1999 involving the gasoline market from refinery to pump - with no apparent idea of when it will reach a point of resolution.

"We're plagued by structural deficiencies that leave drivers particularly vulnerable to market changes," said Tom Dresslar, the Attorney General's office spokesman.

In the case of sudden spikes in the market, Dresslar thinks this may be difficult to prove as an antitrust violation.

He suggested that motorists seeking to file complaints go online to www.ag.ca.gov/consumers/mailform.htm.

"If consumers get hit with like a 17 percent price increase in one day, particularly in a situation (with road closures), they have good reason to question whether the price increases are justified," he said. "Sometimes there's a difference between what's legal and what's right. This may be one of those cases."

Analysts for AAA and the California Energy Commission agreed, citing the free market, which allows an operator to dictate the prices.

"It's not uncommon in small towns for prices to regularly go up on the weekends. That's why locals are known to buy on the weekdays," commission spokesman Rob Schlichting said.

But fuel prices are complicated in Tahoe, said Tony Barchetti, who admitted to raising his prices by 10 cents a gallon. The owner of Roadrunner Gas in Meyers made the case that at a retail level, small station operators pay exorbitant costs to stay in business and withstand a low volume of customers.

California regulatory restrictions and distribution costs make hard to compete with Nevada's lower wholesale rates, Barchetti said, and that's why the trend has stations in an ongoing game of ownership musical chairs.

"As an industry, gas stations change hands here because we're slowly getting squeezed out without the volume and more restrictions," he said.

Barchetti said he invested about $30,000 for new equipment in 2001. By next year, he'll need to put in another $50,000 into the station for new dispensers to meet state regulations.

Tom Sargent, spokesman for the Nevada Attorney General's Office, sympathizes.

Although retail prices are traditionally lower in Nevada than California, mandated pre-additives jack up the rates. For instance, Nevada adds one that works to stop the fuel from evaporating in arid climates. This increases the price by 5 to 10 percent.

"It's a complex pricing structure," Sargent said, listing additives, OPEC whims and winter-summer formulas as a few examples.

He recommended that Nevada motorists with complaints contact the Bureau of Consumer Protection at (775) 687-6300.