Good gas price goals needed

People who live in Calais are complaining of gasoline prices much higher than elsewhere in the state. Consistently, a Calais motorist can drive to Pembroke and get gas for two to four cents less than in the border town. Just as consistently, she or he may stop at pumps down in Clinton, and the prices are more than a dime less than up by the border.

Complaints are OK, but maybe, while we aggressively search for fuel alternatives, we should look it over, ask questions about our situation, offer remedies.

The usual explanation for high gas prices in Calais is that prices are set to give a break to people traveling from points north. That is, market forces. You can easily translate “market forces” (the preferred mantra) into “we’ll charge what we can get” (the avoided target for condemnation).

Meanwhile, Calais retailers will scream bloody murder if Canada customs threatens the flow of New Brunswickers trying to dodge high sales taxes and customs duties which help fund their national health care, high pensions and other public services we Mainers can only hope for.

A recent report on gasoline prices under the direction of Maine Assistant Attorney General Francis Ackerman dismisses two factors: wholesale prices and transportation costs. The report notes that wholesale prices by the two major suppliers – the Bangor Rack and the Portland Rack – are pretty close, and don’t jar prices here to their disproportions. When the report addresses transportation costs – an old bogey man for Washington County retailers – something called “a reasonable working estimate of the costs associated with transportation of gasoline” is introduced, along with mileages and costs to towns up here in Washington County.

Eastport is described as being “at the end of the line.” But Calais, “… though not as far as Eastport attains the highest prices … Washington County prices appear to become more disproportionate with increasing distance – until one gets to Calais.”

“Until one gets to Calais.” Why?

It’s the Canadian border. It’s just the market forces. The usual explanation of throwing up your hands and doing nothing.

Then, there are these retail (profit) margins. While the report notes the margin may vary, as between the Bigs and the Littles, the margin is higher up here than elsewhere in the state.

“Be that as it may,” the report says, as if a breeze were disturbing the leaves on your popular, “it is clear that small gasoline retail business in Washington County requires higher margins … to enable them to survive in the context of the Down East region’s decentralized and sparsely populated rural economy.” To whom is this “clear”? Think the customer from this sparsely populated economy, likely in a minimum-wage job, might like a little “margin for survival” left in his or her pocket, too?

Ackerman’s report says, of markets up here, “… those markets tend to be highly concentrated (i.e., they have relatively few competitors with high market shares),” the report says. “It is axiomatic in antitrust theory that high levels of concentration tend to result in higher prices for consumers.” Apparently, though, the antitrust ax handle is not long enough to bring an antitrust investigation.

This high level of concentration makes for strange things, it seems. “In Washington County … a few modern high-volume gasoline outlets operate successfully…” the report, in part, says. “Why do these operations not compete more aggressively and lead prices down for the benefit of consumers?” A good question.

Why don’t the Bigs lead prices down, to counter what the report elsewhere describes as “the upward pressure on prices” exerted by New Brunswickers?

The answer is “… these large retailers find themselves in a delicate position [because of] Washington County’s history of predatory pricing complaints and investigation. In an environment where low-volume independents have repeatedly come forward with predatory pricing complaints, a dynamic other than competitions comes into play. Large competitors who have the ability to drop prices to win market share decline to do so for political or public relations reasons – to avoid making enemies.”

Ackerman’s report describes predatory pricing as, “Sustained below-cost pricing by a monopolist or quasi-monopolist for the purpose of forcing competitors out of business. However, it is notoriously difficult to prove…” There go those hands in the air again.

This thing about “the delicate position” of large competitors who could lop off a few cents and get additional customers is a cover-up for oily diplomacy among gasoline retailers and the greedy, grasping claw of the Bigs, who claim “justification” for their acts in a “dynamic other than competitions.” Where have the market forces gone?

Moreover, in all this public relations among the retailers, where have customer relations gone? The one thing which screams at you in all this is that the gasoline retailers in Calais seem to have forgotten their Maine neighbors.

In the end, it’s going to be about morality. Neighbors setting goals which benefit the neighborhood. No Littles launching investigations and (in words paralleling the report) “discouraging competition” and discouraging the Bigs from “leading prices down.”

We are going to have to fall back on ourselves. Our best selves.

Washington County folks are consistently generous, when it comes to benefit suppers and other acts of charity. So we should look at reminding our Calais gasoline retailers that, even when they are selling gasoline, they are still our neighbors, and we expect them to be neighborly.

Now, this may sound like schoolboy pie in the sky. However, why can’t we make a start in this direction? Specifically, why can’t gasoline retailers here be persuaded to use measuring sticks and electronically registered pump sales, in place of a bar code? Why can’t they be persuaded to make their price at Gougegulch and points south price, good for neighbors and visitors from points north?

Why can’t Bigs be persuaded to use their leverage? Won’t gasoline retailers here return to customer relations for Maine customers?

It really is about setting good goals. We can do it. If we have the will to do it.

Ron Cuddy is a resident of Calais.