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Ammiano: Gas prices would drop if refiners sold stations
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Related Topics: SAN FRANCISCO
SAN FRANCISCO (Map, News) - Drivers could potentially save a little money at the pumps if The City forces oil refiners to sell off company-owned gas stations within San Francisco, according to one city supervisor.
Under legislation introduced by Supervisor Tom Ammiano, oil refiners would be required to sell off their company-owned gas stations within two years.
Doing so, according to Ammiano, would increase competition, affecting the fuel prices at San Francisco’s 107 gas stations, which have long had drivers paying some of the highest prices in the country for gas.
“I strongly believe that The City needs to use our policing powers to protect consumers in what appears to be a noncompetitive market place,” Ammiano said.
According to the City Controller’s Office, the legislation “intends to stop refiners from price gouging by forcing them to sell their stations to either franchisees or independent operators” and, to the extent that more owners would increase competition, “this could put downward pressure on prices.”
However, the report questions how much of an effect the bill could have on gas prices. Refiners base the wholesale price of gasoline on the location of the gas station, a practice known as zone pricing, the report said. Prices are set based on the level of demand along with what consumers in that area are willing to pay.
“While entirely legal, price discrimination allows firms to earn profits above a purely competitive level,” the report said.
Filling up at the pump in San Francisco has long been more expensive than filling up elsewhere. This summer, drivers filling up their tanks in San Francisco were paying 4 percent more at the pump than the average cost of gas in the rest of California and 9 percent more than the nation, according to the Controller’s Office report. In November 2001, those filling up at the pumps in San Francisco were paying 17 percent more than the rest of the state and 35 percent more than the nation.
The legislation will be heard today in the Board of Supervisors Rules Committee.
For more information on gas prices and it's history, check out Gas Prices.
Comments from Examiner Readers
2:24 PM MST on Thu., Dec. 6, 2007 re: "Ammiano: Gas prices would drop if refiners sold stations"
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10:08 AM MST on Thu., Dec. 6, 2007
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9:48 AM MST on Thu., Dec. 6, 2007
re: "Ammiano: Gas prices would drop if refiners sold stations"
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Examiner Reader said:
San Francisco does not need to control who owns gas stations. San Francisco just needs "more" gas stations selling gas. More gas stations will bring down prices by good ole supply and demand.
70 agree | 67 disagree
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Examiner Reader said:
San Francisco is supposed to be a "transit first" city. This means we encourage the use of public busses and discourage the use of cars. It also means that high gas prices are good, not bad, because they encourage the use of public transit. Also, the higher gas prices get nationwide, the more pressure there will be on the automotive industry to improve the mileage rates for cars. So what happens? Ammiano comes up with a lamebrained idea to reduce the price of gasoline. Even if he were right in his theory, why would SF want to reduce gas prices? It isn't good for our transit first policy - if anything SF should add a city tax to gasoline to further discourage cars. SF has way too many supervisors. The fact that the supes get involved with stuff that isn't any of their business is because they don't have enough real work to do. There are too many supes earning too much money with too much time on their hands and sticking their fingers into too many pies.
64 agree | 71 disagree
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Examiner Reader said:
Oh for heaven's sake! Since when does it fall within the responsibilities of the board of supes to determine who should own service stations? Talk about meddling in something that isn't their business! I just returned from a visit to Cuba and I saw first hand what happens to a society where the state controls all the businesses, owns all the services, and makes all the decisions for its citizens. It doesn't work and the population is far worse off. If Ammiano and his fellow travellers want to manage how businesses are owned and run then they need to move to a communist country and live under that type of regime. But don't force it on SF - we may be liuberal but we aren't crazy.
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