Drivers in Greater Portland are paying some of the highest gasoline prices in the state this week, roughly 20 cents a gallon more on average than what stations around Bangor were charging Sunday.

The price spread narrowed a bit Monday, as average retail prices for regular unleaded in Bangor rose a penny, to $3.60 a gallon, according to the daily AAA Fuel Gauge Report.

Gasoline retailers that do business in both markets say they aren’t gouging customers in Portland. They’re losing money or breaking even in Bangor, they insist, because of a price war that – at least for the moment – has changed Maine’s typical gas pricing patterns.

Gasoline tends to be more expensive outside of southern Maine, which has the state’s largest petroleum terminals and population centers.

Prices have fallen statewide by more than 7 cents in the past week, to $3.71 for a gallon of regular. They have been following national trends; the average U.S. price Monday was $3.59, down from $3.65 a week ago.

But retail prices have been slow to ease in Portland. The average price for regular around Maine’s largest city was $3.80 on Monday, according to AAA. That was down only 2 cents from a week earlier.

By contrast, Bangor’s average price plunged 11 cents in a week.

The fractured market has left C.N. Brown, which has 65 stations in Maine, selling some of the cheapest and some of the most costly gas at the same time. The company was charging $3.49 a gallon Monday at the Wilson Street Citgo station in Bangor, and $3.84 at the Big Apple at 27 Washington Ave. in Portland.

The company is basically breaking even in Bangor, said Jinger Duryea, C.N. Brown’s president. The gross profit margin in Portland is about 25 cents a gallon, she said, to cover the cost of trucking the fuel and expenses such as labor, taxes and credit card fees.

“Portland station owners are making an average margin, but in Bangor, they’ve taken the margin down to cost,” she said. “It doesn’t mean station owners in Portland should follow suit and lose their shirts.”

Like the stock market, petroleum markets have been volatile this month. The uncertainty has made station owners wary about lowering retail prices to fully reflect big drops in wholesale costs, Duryea said.

“We try to drag our feet a bit when prices go down, because the product in our tanks is more expensive,” she said.

When wholesale prices rise, some owners try to “massage” a steeper increase into their retail prices, Duryea said. That helps pay for the next more costly delivery.

Motorists generally aren’t aware of what makes up the cost of a gallon of gas.

For example, a gallon that costs $3 at wholesale at terminals in South Portland, Bangor or Searsport has 49 cents tacked on in state and federal taxes. Trucking to stations can add a penny in Portland, at least a couple of cents in Bangor and a dime in Aroostook County. Some dealers then try to add 20 to 25 cents, to cover expenses. In southern Maine, a smog-fighting blend of summer gasoline can add another 4 cents.

It’s easy to see that a station owner with gas that costs $3.49 a gallon after taxes doesn’t want to sell it for the same price, said Alan Dorr, general manager for procurement at Dead River Co.

“This year has been bloody for retailers,” he said. “They need to make a profit when they can or they’ll be out of business.”

Dead River has 30 stations in Maine, most selling Shell gasoline in northern and eastern communities. It has one station in southern Maine, on Elm Street in Biddeford, in a very competitive market. That station was selling regular unleaded Monday for $3.59. It was the cheapest gas in town, according to MaineGasPrices.com, which surveys motorists on what they pay.

By contrast, Dead River’s station in Houlton was at $3.71, the statewide average.

One catalyst for the price war in Bangor, observers say, is independent operators around the Bangor Mall and in neighboring Brewer.

A Sam’s Club station has been selling regular for $3.41 a gallon. That’s a members-only price, but nearby stations, including an Irving station across the street at 633 Hogan Road, are competing. Irving had regular for $3.49 on Monday.

The Irving pumps are at a Circle K convenience store, which operates the facility and prices the gasoline. Circle K field managers declined to discuss pricing, and the Maine operations manager didn’t return phone calls.

Across the Penobscot River, the Brewer Car Wash on Wilson Street was selling gas for $3.50, with a 5-cent discount for cash. The business is competing with a Tradewinds Car Wash that recently opened nearby, said shift supervisor Blaine Williams.

“We’re making 3 to 4 cents a gallon after delivery charges, if that,” Williams said.

Rock-bottom prices have attracted customers, he said, and gas sales are way up.

“I honestly don’t know how long this is going to go on,” he said of the price war.

While motorists are enjoying bargains in Bangor, they are paying above-average prices in Greater Portland.

Some of the stations that have been flagged in the past few days by contributors to MaineGasPrices.com have some of the highest prices in the state: a Gulf/Cumberland Farms on Cottage Road in South Portland, at $3.85; Mobil and Irving pumps on Route 1 in Yarmouth, at $3.84; and a 7-Eleven store at Washington and Cumberland avenues in Portland, at $3.83.

The 7-Eleven is across from C.N. Brown’s Big Apple. With wholesale petroleum prices changing quickly, retailers such as C.N. Brown are doing price surveys three times a day to track their competition.

“If we see someone under us, we usually follow,” said Duryea, C.N. Brown’s president. “But we do need to make a margin to stay in business. Gasoline operators cannot consistently offer their product at cost.”

 

Staff Writer Tux Turkel can be contacted at 791-6462 or at: [email protected]