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Answers hard to come by in recent gas prices spike

Here we go again. On May 25, we ran a positive editorial thanking the local gas stations for being more competitive over the past year. We were consistently competitive for over a year with other Upper Peninsula communities.

At times we were a bit lower than Escanaba and Iron Mountain. We were even closer to Houghton in prices on occasion. Something changed in the last two months and once again AAA is reporting that Marquette has the highest price of gas in the state among the areas that they use in their survey.

We know by checking on GasBuddy’s website that there are other remote places in the state that are selling gas for a higher price per gallon than in Marquette.

The difference for those few is that they are in more rural areas and they can sell at a higher price for convenience to their customers. Customers in those areas can travel an hour away and get cheaper gas or buy from the remote gas stations and pay more per gallon.

That same criteria does not explain the reason the price of gas is 20 cents per gallon more in Marquette than in Iron Mountain or Escanaba. We have been told gas is more expensive in Marquette because it is farther away than Escanaba and Iron Mountain. If the distance between Iron Mountain and Escanaba were the reason for higher gas prices then Houghton would be the most expensive of the four cities.

In fact Houghton in spite of being the farthest traveling distance has the lowest price of gas. Houghton is usually around 25 cents per gallon less than Marquette.

We have been inundated with phone calls, emails and personal contacts from our readers over the past several weeks asking us to try and get some answers as to why the price of gas is so much higher in Marquette than other parts of Michigan.

On Thursday, we ran a story, but we really did not get any real answers that make sense to us as to why gas in Marquette is so high. Many people are making assertions that since the actual building has started for the new gas station owned by the KBIC in Marquette Township, that Marquette gas stations are going to keep the prices high now because as soon as the new station opens they will be forced to reduce gas prices in Marquette.

We have noticed that the price of gas in Iron Mountain, Houghton and Escanaba is lower due to competition in those markets. In checking on the GasBuddy website on Wednesday of last week it shows in Escanaba that prices can vary by 37 cents per gallon in their market. In Houghton the price per gallon can vary by 85 cents per gallon. In Iron Mountain the prices vary by 75 cents per gallon.

In Marquette, the majority of the stations only vary by 1 to 2 cents per gallon. The largest difference shown last week when we checked on Wednesday was a difference of 7 cents per gallon in Marquette.

Marquette clearly stands out as the least competitive gas prices among the four communities. What we see in gas pricing is that there is no one currently in the Marquette area that is willing to be more competitive in pricing. The majority of the gas stations stay within a 1 to 2 cents apart.

In our May 25 editorial, we made the statement that the local stations had been wise to be competitive before the new KBIC station opened, which would mean that people would remain loyal to those stations because they had been treated well in the past.

What has happened in the last couple of months with gas pricing in Marquette will drive those customers to support the new KBIC station when it opens.

It is our understanding that they may not offer prices as low as The Pines in Baraga because the station in Marquette Township is not on Native American land.

We do expect that the KBIC station won’t join the Good Old Boys club, which keeps prices within 1 to 2 cents apart, which means we will then have the same competitive pricing advantage as in Houghton, Iron Mountain and Escanaba.

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