Millinocket gas prices under fire Officials want to see more competition

Every few weeks, Jimmy Busque delivers maple syrup made by his company, Busque Enterprises of Millinocket, to places such as Newport and Greenville. Along the way, he sees gasoline prices that fluctuate as much as 35 cents to the gallon.

Millinocket prices, he said, are almost always the highest.

“People here are being overcharged,” Busque, a Millinocket Town Council member, said Friday. “I think they [gasoline dealers] are taking advantage of the situation and people living here have to pay the price.”

Busque isn’t alleging corruption, but rather a lack of competition among dealers that kept gas prices at about $2.37 per gallon in town on Jan. 21 when dealers in Newport, Augusta, Clifton, Plymouth and Manchester were charging $1.99 to $2.07 per gallon.

Busque and Town Councilor Scott Gonya want to do something about that. At a council meeting Thursday, Gonya discussed the town getting into the gasoline-selling business to help residents, while Busque said he hoped the town’s ongoing efforts to promote economic development would include drawing more gasoline distributors to the area to spur increased competition and lower prices.

“This is the first step. We are just throwing this out there to get some dialogue going,” Busque said.

Lincoln Town Councilor Jeffrey Gifford sees a similar problem in the Lincoln lakes region, where gasoline prices are typically about 20 cents higher than in other, more southern parts of the state.

“You can go anywhere within a 70-mile radius in Lincoln and get cheaper gas,” Gifford said Friday.

State Rep. Everett McLeod, R-Lee, has discussed the gas price situation with Maine Attorney General Steven Rowe’s office, Gifford said. McLeod could not be reached for comment Friday.

Although Lincoln’s situation is vastly different than the Katahdin region’s, where half the population is at or below the poverty line and unemployment runs twice the state average, both areas have substantial populations that must travel two or more hours along Interstate 95 for work.

This makes upward price fluctuations difficult to bear, Gifford said, especially in areas like Millinocket, where many businesses have to hit Bangor, Augusta or Portland to create new or service existing markets.

“When your rate of pay here is less than in other areas – it’s certainly not any higher – the high gas prices really can hurt,” Gifford said.

Assistant Attorney General Francis Ackerman would not confirm whether Rowe was investigating the gas price differences in the area, but said it was unlikely.

Rowe’s office has studied the state gasoline market intermittently since the 1980s and found that wide price fluctuations were not caused by price-gouging or rigging, but by either intense competition or a lack of it.

“The fact that prices are higher in one area of the state than another is not cause for opening an investigation,” Ackerman said Friday. “If the level of discrepancy on prices reaches a certain point, that would be cause for investigation, but those would be very rare cases.”

According to an 11-page report Rowe issued in May, the lowest retail averages in Maine are likely to be found in Sagadahoc, Kennebec, Androscoggin, Waldo and Somerset counties in any given month.

Washington and Aroostook counties and other areas close to the border with Canada, where prices are dramatically higher than in the U.S., are likely to have per-gallon prices 12 to 19 cents higher.

Sparse populations, a lack of competition and poor economic conditions apparently exacerbate high gasoline prices, the report concluded. Smaller gasoline dealers typical in rural areas often cannot afford to offer the lower prices of larger retailers who sell more gasoline.

Bob Moore, president of Dead River Oil Co., which runs 19 gas and convenience stores in Maine, including one in Millinocket and another in East Millinocket, said the lower gasoline prices found in areas such as Augusta are driven by fierce, sometimes crazy competition, with dealers selling at below wholesale cost.

“There are mini gas wars in some areas,” Moore said.

According to MaineGasPrices.com, average prices peaked in Maine at about $2.40 per gallon on Dec. 27, and have dropped steadily to about $2.15 per gallon on Friday. Prices started at about $2.21 per gallon in Lincoln on Friday.

“What I have seen is prices coming down a lot and there are some pockets where prices have been questionably low, below costs,” Moore said. “I don’t know how they [dealers] do it, but it’s great for the consumer in the short term.”

Enough competition exists in the Katahdin region to keep prices comparable to other state areas, Moore said.

Gonya wasn’t so sure.

He plans on pursuing the issue with Millinocket town officials as they begin one of their most ambitious efforts in years – restoring a town economy buffeted by more than 20 years of bad news, including layoffs of about 3,800 millworkers and the town’s population shrinking from about 8,000 residents to about 5,200.

“The whole idea is competition,” Gonya said. “No price controls exist on gasoline and home heating oil, or food. We’re going to start looking at what it will take to generate competition.”