The Pilot’s op-ed page keeps up the scare tactics


Our thrice weekly local paper — whose first edition was reportedly brought down the mountain on stone tablets by Moses — does a nice job of scaring its readers while utilizing very few facts and doing little, if any, investigation.

They did it on fracking and the marriage amendment.  Now, in today’s paper, they’re trying it again with alleged “gas gouging.”

A few folks have written in to the paper — saying they can’t understand why gas is priced at one level in one area, and another in another area.  Instead of digging around, and asking some detailed questions of experts, The Pilot is going for the big scare. ‘

Let’s get some facts out on the table.  Individual gas station owners depend on local oil distributors to provide them with their gasoline supply.  (Some stations are owned by distributors, and some are not.)

Station owners pay a set price to the distributor, then turn around and charge a price to their customers.  Station owners I’ve talked to say they don’t really make their money at the pump.  The real money is made INSIDE the store on sodas, cigarettes,  beer, candy and the like.

The distributors get their gasoline from the big oil companies.  THAT price can change hourly or daily and can be affected by a number of things — new regulations passed by governments, political instability, weather, and Mideast turmoil, among other things.  

Did you know that the federal government has their own specific standards for the manufacture of gasoline?  Did you know that many states have their own mix requirements on top of those federal standards?  THOSE government mandates run up the cost of gasoline right from the beginning. 

The Pilot editorial asks where Adam Smith’s “Invisible Hand” is.  They want to know where competition can be found.

I travel around the region quite a bit too.   One thing I have noticed:  gas prices are more competitive in high-traffic areas with a number of different stations (with different ownership or affiliations) within sight of each other.   There is a regular price war between stations along I-95 in Lumberton.

In areas where there is high traffic — but not much competition from other stations — you see higher prices.  (In Pinehurst, most of the stations are all owned by the same company, which also owns an oil distribution company. )

I saw an Exxon affiliated station in Wilkes County with one price for regular unleaded. I saw another Exxon-affiliated station in Moore County on the same day.  It had the SAME price for regular unleaded as the Wilkes County station.   You likely have the same distributor for both stations  in this case.

Calling for price controls is wrong-headed and outrageous.  They have never worked.  (They played a big part in the economic turmoil of the 1970s.)

Our outrageously high gas tax burden in North Carolina plays a huge role in the prices we are seeing.  The total gas tax burden for North Carolina drivers is more than that for South  Carolina and Virginia drivers COMBINED.

If you really want to see some positive changes in the price of gas,  we need to beat on our legislators to knock that tax rate back to a respectable level in line with that of our neighbors.

One of the nice things about freedom and capitalism is that we have choices.  If you don’t like a business’s customer service or prices, you can go down the street to a competitor.  Capitalism should be celebrated and treasured, instead of beaten down by even more regulation.