January 23

High taxes, little competition, put Maine gas prices among nation’s highest

The sudden jump in price coincides with Thanksgiving travel.

By Tux Turkel tturkel@pressherald.com
Staff Writer

(Continued from page 2)

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In this November 20, 2013 photo, the Cumberland Farms convenience store on Route 1 in Yarmouth. Gas prices are begin to go up again after reaching a three-year low, just in time for Thanksgiving travel.

John Ewing/Staff Photographer

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In this November 26, 2013 photo, the Cumberland Farms convenience store on Roure 1 in Yarmouth. Gas prices rose an average of 6 cents in a week across the state of Maine. At this station, the price rose 10 cents, but was still below the $3.45 per gallon state average.

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Interactive map: average gas prices in Maine, Jan. 2013 through Nov. 2013
 
Click below to find the highest and lowest gas prices in the state.
 

C.N. Brown held the Big Apple price at $3.28 until early last week, when it went up overnight to $3.36. On Friday, Cumberland Farms also raised its price, to $3.37. By Tuesday morning, the Big Apple was up to $3.43 and Cumberland Farms had moved to $3.38.

PRICES QUICK TO RISE, SLOW TO FALL

A jump in the retail price often follows a spike in supply costs, said Green at AAA. But don’t expect prices to ease as quickly as they have risen.

“There’s a term in the business: ‘Gas prices tend to rise like a rocket and fall like a feather,’ ” he said.

When owners see wholesale prices rising, Green said, they know the next truckload will cost them more than what’s in the ground. So they try to get ahead of the increase. When wholesale prices drop, station owners lower retail prices gradually, to make more money on the downside.

That calculus is magnified during a price war. The convenience store model has turned gas into a loss leader at some outlets, Green said, a way to draw people to buy products with higher profit margins, such as coffee, smokes and sandwiches.

Looking ahead, analysts have mixed views on price trends. The Lundburg Survey, a widely quoted petroleum research company, is speculating that retail prices may rise another nickel or dime, even if crude oil prices remain low.

AAA, which attributes the current rise partly to stalled refinery maintenance, expects the increase to be short-lived.

GasBuddy.com says the breakthrough talks on Iran’s nuclear program may bring more Iranian oil onto the market, pushing prices lower over time.

“If Iran and the West can ultimately come back to the table and agree on a longer-term resolution, there could be a lasting effect on oil prices,” DeHaan wrote in his blog Monday.

Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

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