Hatteras islander Jarvis Williams, who owns an Exxon gas station in Buxton, went to Manteo last Monday to tell the Dare County Board of Commissioners what he thinks of their continued hammering on gas prices in Dare County.
He hadn’t signed up to speak during the time the commissioners set aside to hear from gas distributors, so he came home without uttering a word in public.
However, he was happy to share what he would have said if he had been allowed by Board Chairman Bob Woodard, who did invite him to come back another time.
“I don’t think it’s any of their business what I charge for gas,” Williams said in a phone interview, adding that the state’s Attorney General had been asked to investigate charges of high prices and perhaps price gouging in the county.
“Let the Attorney General do his job,” Williams said. “It may take a long time. It’s very complicated.
“To me, (the commissioners) are overstepping their bounds. There’s just not a problem, but they are making it a problem.”
Complaints about gas prices are long-standing on the Outer Banks, where they are consistently higher than in neighboring counties. Last winter, the complaints escalated on social media and some who were posting online began calling for the county and/or the state to investigate.
Woodard immediately complied, and, with the consent of the rest of the board, sent a letter to Attorney General Roy Cooper that said the high gas prices put a “harsh and unjust” burden on the people and damage the tourism economy. He said the board has heard from people who “view the exorbitantly high gas prices as a consumer trap designed to take advantage of those traveling to Dare County on vacation.”
One other county in North Carolina made a similar request of the Attorney General last winter — Moore County in the Piedmont, which is also in a wealthier resort area.
State law prohibits price gouging during a state of emergency, such as storms, but otherwise gas prices are largely controlled by the free market.
However, the Consumer Protection Division in the Attorney General Office agreed to investigate.
The division will not comment on ongoing investigations. But a spokesperson for the office did tell The Island Free Press in mid-March in response to an e-mail:
“Our understanding is that a state of emergency or other event triggering the price gouging law was not in place in Dare County during the time period in question. Instead, our office is looking to see if there might be any actionable evidence of price fixing or collusion, as opposed to one gas station owner simply looking at what the competition is charging and then charging something similar (which the law does not prevent).”
In response to subsequent e-mails, the spokesperson for the division has confirmed that the investigation is ongoing.
What we know of the investigation since then has come from Woodard, who has instituted “chairman’s updates” on county issues at the beginning of each commission meeting.
Woodard said during an update in March that he had sent a second letter to the Attorney General office.
In June, he announced that, in response to an inquiry, he had received an e-mail from Phillip Woods, special deputy attorney general. Woods told the chairman that, while he was limited in what he could disclose, the attorney general office had sent letters to “three major retailers in Dare County seeking information regarding costs and retail selling prices of gasoline.”
At a later meeting, Woodard said in his remarks that he had been told that the retailers had responded to the Consumer Protection Division’s letter, and that investigators were analyzing the responses.
At the Sept. 8 meeting, Woodard announced that the division continued to evaluate the responses, and he asked his fellow commissioners to approve a letter that he proposed sending to gas distributors inviting them to attend the Sept. 21 meeting to explain why gas prices are higher on the Outer Banks.
The idea to invite the distributors, Woodard said, came while several commissioners were traveling to a meeting in Elizabeth City. Gas prices there and in Currituck County ranged from $2.09 to $2.23, while on the Outer Banks, they were within a penny or two of $2.47.
He told the distributors in the letter that the people of Dare County found it “impossible to understand” why this can happen over such a small geographic area.
One distributor took the commissioners up on their offer.
Lynn Keffer, president of Crossroads Fuel Service in Chesapeake, Va., distributes fuel in Virginia and northeastern North Carolina. He said the family-owned company, which has been in business for more than 50 years, is a wholesaler, not a retailer.
“But I do know something about retail pricing,” he added.
Keffer then proceeded to talk about 10 issues that influence gas prices and contribute to higher prices on the Outer Banks.
Here are some of them:
- Insurance Costs. Keffer said one of his customers in Dare County showed him his property insurance bill. “His was for wind only,” he said. “He is paying nearly 30 percent more for one property with one canopy and two buildings than we are paying for a combined 11 properties, five canopies, 13 buildings, and an assortment of above-ground storage tanks.”
- Pump and point-of-sale repairs. Wind and salt air take a toll on equipment, he said. Outer Banks gas retailers can expect one or two repair calls a month, compared to about four to six a year for an Elizabeth City retailer, Keffer said. And the repair calls, he said, are more expensive.
- Lifespan of the equipment. Keffer said Outer Banks retailers can expect equipment to last half as long as their inland counterparts.
- Property values. They are higher on the Outer Banks. Keffer said that three convenience stores his company owns are valued about 50 percent less than a service station for sale on the Outer Banks.
- Freight. Costs 2 to 5 cents more a gallon for gas trucks.
- Labor costs. Isn’t labor more expensive in the peak season, Keffer asked the commissioners.
- Weather. Storms and hurricanes can shut down business for days, or a week, or a month.
- Credit Cards. They’re used more frequently in the peak tourist season, and cost retailers more in fees.
- Finally, Keffer said, that some dealers in Elizabeth City and elsewhere sell “below cost” for competitive reasons or to honor contracts with suppliers.
“It just costs more to do business in Dare County,” Keppler concluded.
He said he does business with four retailers in Dare County.
“They’re not out to get anybody,” he said. “They’re just out to make an honest living.”
Jarvis Williams said he has known Keffer for a lot of years, and that he thinks he hit the nail on the head, especially with his explanation of how prices can vary in the same region.
And Williams adds that you can add even more costs for doing business on Hatteras Island.
He said he does not believe anyone is unfairly jacking up prices on the Outer Banks — or on Hatteras Island.
“Sometimes, we make more money than the week before, and sometimes we eat alot,” he says.
“Those people up there (in Manteo) need to get an education,” he says.
None of the commissioners asked questions or commented after Keffer’s presentation.
Commissioner Margarette Umphlett said later, in commissioners’ comments, that she found the presentation “interesting” and that she hoped folks who were concerned about high fuel prices would hear it.
It certainly seems that, after almost nine months, the Attorney General’s Consumer Protection Division has had enough time to finish an investigation. If not, they should get on with it.
If there are folks guilty of illegal practices, the public should know. If our Outer Banks gas dealers are just making a living as best they can, like many of the rest of us, the public should know that also.
Meanwhile, the Dare County Board of Commissioners should give it a rest.
It’s nice to keep the public updated, but enough is enough on gas prices.
By the way, this week, the cost of gas was less than $2 a gallon at some places in southeastern Virginia and Elizabeth City. It was running about $2.19 a gallon on the northern Outer Banks and $2.29 on Hatteras Island.
FOR MORE INFORMATION
Click here to read a Jan. 23, 2015 blog, “Fuming over high gas prices.”
Click here to listen to an interview with Hatteras Island gas retailer Bryan Perry, owner of Frisco Rod & Gun and Frisco Market.