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

Gasoline prices are rising again in Maine, after falling to a nearly three-year low earlier this month. On average, they’re up about 6 cents over the past week.

click image to enlarge

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

click image to enlarge

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.

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.
 

Prices are changing quickly, too. At some stations that were in price wars last week, prices have shot up 13 cents a gallon in recent days.

For instance: The average price for regular gas Tuesday was about $3.45 statewide, and a penny less in Greater Portland, according to AAA’s daily survey. A week ago, a Citgo/Big Apple and a Cumberland Farms on Route 1 in Yarmouth were duking it out at $3.28 a gallon, among the lowest prices in Maine. By Tuesday morning, the Citgo was at $3.43 and the Cumberland Farms was at $3.38.

A sudden run-up can be costly for drivers at one of the busiest travel times of the year.

Delays in seasonal refinery maintenance are contributing to the abrupt rise, said Michael Green, a spokesman for AAA. He expects the increase to be temporary.

Even if the market eases in the next few weeks, Maine’s gas prices are no bargain, according to data developed for the Portland Press Herald by GasBuddy.com, an online service that reports gas prices in the United States and Canada.

Maine has the eighth-highest gas prices in the country this week, due largely to state taxes and limited options for supply.

Limited supply options reduce price competition, with the current differential between the most expensive and cheapest stations in Maine at 35 cents a gallon. Nationally, the spread is 97 cents.

Although Portland Harbor is home to major gasoline terminals, average retail prices this year in the state’s largest metro area have been higher than in Lewiston-Auburn or Bangor. That gap has closed in recent days as wholesale prices have risen.

The least expensive gas in Maine is typically in rural and suburban communities where competition creates price wars. That’s the reverse of national trends.

Gas prices are of keen interest in rural states such as Maine, where some people drive long distances to work. The average driver puts 13,000 miles a year on a vehicle, which gets 23 miles per gallon, according to national figures. That works out to 565 gallons a year. So a 23-cent difference in gas – which averaged $3.38 a gallon earlier this month and $3.61 last November – adds up to $130 for the typical driver.

In a few Midwest states, average prices this month fell below $3. That won’t happen in Maine, analysts say.

First, the cost of a gallon of gas in Maine includes about 50 cents in fees and taxes. The state’s share of that is 31.5 cents, according to the Tax Foundation. Neighboring New Hampshire has a total tax of 38 cents, with 19.6 cents levied by the state. That’s a key reason New Hampshire has New England’s lowest average gas prices.

Second, Maine lacks diversity in its supply. Most of the fuel arrives by ship and barge from refineries along the East Coast. About half comes from the Irving Oil refinery in Saint John, New Brunswick. Markets change, but much of the crude oil used to make Maine’s gas comes from overseas, and has been more costly than domestic and Canadian crude.

That contributes to the narrow price spread in the state, experts say. “There’s not a lot of infrastructure in Maine and all your gas is coming from a couple of areas,” said Patrick DeHaan, a senior petroleum analyst with GasBuddy.com.

PRICES OFTEN VARY BY REGION

Some parts of Maine have benefited more from this year’s falling prices than others. GasBuddy.com’s figures show that average prices in mid-November were down more than 17 cents in Oxford, Sagadahoc, Lincoln and Waldo counties. Prices fell only 9 to 11 cents in Cumberland County.

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