Tiger Fuel Offers Gas Price Explanation

Brian McNeill asked around about Charlottesville’s high gas prices for the Daily Progress, and got the following from the president of local fuel distributor Tiger Fuel:

“The prices are changing very quickly. They’re coming down,” said David Sutton, president of Tiger Fuel Co., which operates a dozen local gas stations and provides oil to roughly 100 others. “Right now, Charlottesville’s prices are a little higher than elsewhere, but they’ll come down, certainly by the end of the week.”

High-volume gas stations are generally charging less than some others, Sutton said, because they are resupplying with gas bought at a lower rate. Stations with less volume are charging higher prices, he said, because they have not yet run out of the more expensive fuel.

The Charlottesville region’s market, he said, does not consume gas as rapidly as places like Hampton Roads, Northern Virginia and Richmond. Consequently, Charlottesville’s prices sometimes lag behind when it comes to price, he said.

“This is not a high-volume market,” Sutton said. “Our prices don’t change as quickly.”

In a comment on the Progress’ site, reader JB makes a good point about this logic:

If C’ville gas prices are slow to decline because of the area being “low-volume”, then the same logic should apply when prices are on the rise. I don’t recall the C’ville area lagging behind when the price was going up. Greedy gas weasels!

The good news is that price are dropping. The bad news is that it’s because the economy is in a nosedive.

47 thoughts on “Tiger Fuel Offers Gas Price Explanation”

  1. Mr. Sutton’s explanation doesn’t jibe with the facts. The demand for gas here is just as great as across the mountain. Therefore the price should be similar. Our gas prices are at least 50 cents higher than Waynesboro! Some stations in the valley are charging $2.74 today, while most Cville outlets get around $3.30! Even the Sheets in Ruckersville is under $2.85
    How is it that one company can dictate the retail prices for every gas station in the area?

  2. Free capitalist market system at its best!!!! Monopoly, greed with the rich getting richer…..Major contributing factor to the high cost of living in Charlottesville….

  3. In Crozet, Brownsville market is charging $3.09 while the Exxon across the street (a stone’s throw away) is charging $3.39…

  4. Unbelievable explanation from Mr. Sutter! So, by that logic of inventories ‘at the actual retail location’, prices should be very slow moving upwards. But as we all know, that’s not the case!
    I’m sure Mr. Sutton feels if lies are effective and repercussion-free for his Bush/McCain friends, it’ll be just fine here in little cville.

  5. Agree with michael m – I doubt seriously that Charlottesville is a “lower-volume” market than Waynesboro, yet their prices have always been at least 10-20 cents lower. More of a difference lately.

  6. “This is not a high-volume market,” Sutton said. “Our prices don’t change as quickly.”


    Gas in Stuarts Draft has been steadily shedding $0.10 a day for about a week or so. In fact, yesterday it went down from $2.89 in the morning to $2.79 in the evening.

    And we all know what a high-volume market Stuarts Draft is.

    Why don’t they just admit the truth and say, “We’re charging more because we can?” At least people might give them credit for confirming what we all already know. It’s not like C’ville drivers are going to drive to Stuarts Draft, Waynesboro, or Ruckersville to fill up and it’s not like people could get any more outraged at gas stations, so why not just be honest?

  7. Why don’t they just admit the truth and say, “We’re charging more because we can?”

    In my limited knowledge of the fuel market, this does seem to be the most likely scenario. Capitalism tells us that the pricing will be set at whatever the market will bear. Clearly the market will bear the price of fuel in the Charlottesville area. That’s not gouging, as I understand it—that’s just smart business. I appreciate that it’s not good public relations to say “we’re charging more because we can,” but it’s also not good public relations to spin tales about slow pricing reaction times.

  8. I paid $2.79/gallon at a little country market on a lonely highway halfway between West Point and Gloucester Va this past weekend, and I know that’s not a higher volume market than Charlottesville. I don’t know what is more irritating – the fact that they so blatantly lie about the prices or the fact that they think we are stupid enough to believe their lies.

  9. I was traveling last week from Austin, Texas to Charlottesville. I wish I was exaggerating when I say, C’ville has the highest price per gallon that I encountered. Killeen, Tx, $3.02, Texarkana, $3.19, Memphis, $3.10, Cookville, Tenn., $3.10 Wytheville, Va, $2.98, C’ville, $3.39.
    Richmond and Lynchburg, under $3.00!!!!!
    I challenge you to drive outside of the city to buy gas and drive the prices down.

  10. Sutton’s answer is total bullshit. I took a long drive thru very rural (low volume) areas in four states last week and everywhere gas was $0.40 per gallon cheaper.

    It’s way past time for Cville City Council and Albemarle Supervisors to hold public hearings on gas gouging in Charlottesville.

    I’m filling up in Richmond tonight.

  11. Am I missing something? What on earth can city council & the BOS do about price gouging, other than complain through the same state channels that individuals would also use?

  12. We don’t have to look far…gas prices on the south side of town are more expensive than on the north side. It always is. That’s just bull….

  13. Collusion …….hmmmm….. I wonder if stations don’t look outside their window to check on the prices of one another? neighboring stations always seem to be within .01 or .02 of each other.

  14. Yeah, usually that drives the price down. But they don’t have much of a margin over their wholesale cost from Tiger, etc., they say. It’s all in the chips, sodas and scratchers!

    Somehow in every other area of the state prices go down. I want some of that Tiger business!

  15. I am familiar with this industry and the reality of the situation is that most of the convenience stores that people have referenced here are simply not very good businessmen . What happens is that they don’t track their inventory and as soon as the price changes they change the price at the pump and what they do not realize is that they are selling the gas that is still in their tank at a loss. This type of ignorance pervades the market and forces the other companies to drop their prices and unload their old fuel at a loss. I am new to this area but this is a problem the company I worked for back in Michigan was consistently faced with. My guess is that tiger and the other providers in c’ville are just doing good business and as soon as the old inventory is depleted their prices will adjust to where they should be

  16. clint – again, that argument holds no water. It would if prices rose slowly, but they don’t. Prices rise in leaps and bounds, so these station owners are seeing a windfall profit when they’re selling relatively cheap gas they have in stock at prices that probably won’t actually hit them for weeks or longer.

  17. From the Daily Progress table our gas prices did not lag at any point when gas prices were headed up. Mr. Sutton was shown to be a liar by the graph that was with the article. It’s legal profiteering unless we can prove collusion. A protest would be fun to watch.

    The BOS and City Council can wag their fingers and waste their time looking into to it. The free market is not a friendly place.

  18. clint–
    your view is poorly distorted.
    so what you’re saying is that all the stations outside of cville are good business people looking out for the customer and ALL stations WITHIN Cville are bad and greedy ?
    don’t think so. you HAVE to look at their supplier and that’s Tiger fuel. Tiger is what utimately affects the price.
    hey joe– who do you suggest we complain to if the BOS/CC can’t do anything about it ??

  19. Trust me, clint is full ‘o shiit. C-Store jobbers have become extraordinarily sophisticated over the years and they know EXACTLY their costs. Unless, of course, ONLY cville C-Stores folks are dumb and the rest of the country they’re brilliant.

    Seriously, typically, the market takes care of the price settings for retail fuel. It seems likely there’s either retail collusion or distribution problems in cville.

  20. How about using the old computer to find the cheapest gas you can, and simply boycotting the higher priced stations? EG, the BP near my Woolen Mills neighborhood used to be more expensive, now it’s the cheap gas.

  21. John: complain by going somewhere else to buy gas.

    That’s pretty much it.. the stations have a right to charge whatever they want, and you have a right to take your business elsewhere.

  22. Karl-

    Because this is such an incredibly liberal democratic town that people expect government to fix everything for their personal comfort and pleasure.

    Unless that government actually impacts them some other way then the knives come out….

    Despite all the burial psalms of Adam Smith, it is still a free market economy for the most part. If you dont like the price of something then do not buy it.

    Tiger does not have a monopoly on the market. And no one forces you to avoid the bus. Or your bike. Or makes you work in Cville.

    Really, Clint comes on with a pretty accurate solution and people resort to name calling. I suspect his idea is a lot closer than we think. Most Cstore owners are just trying to keep their tills balanced and staff in place. Have you seen the caliber of staff at most Cstores?

  23. Big_Al you raise a good point and to a certain extent you are right on. When prices go up it is usually an opportunity for these stores to recoup some the losses they sustain when prices drop, but nobody in the c-store business has ever sustained a windfall profit on gas sales. These companies margins are absolutely terrible. They often sell gas at loss or at just enough to cover their costs because they are anticipating that you will come into the store and buy a coke and a hot dog, and that is where they try to make money.

    Also companies like tiger are distributors not suppliers. The suppliers are the ones making all the money. Our frustrations should be directed to the people tiger is forced to buy from. We are shooting the messenger here.

    If you have a problem danpri, Chad, and Karl are all exactly right, you should buy your gas elsewhere.

    I suggest the people commenting on this blog that resort to name calling and profanity keep it up. It really makes you sound smart and validates your argument.

  24. I wonder what “Joe The Plumber” thinks about gas prices? Is he an Adam Smith “Invisible Hander” free market man, or does he feel we’re victims of price fixing by the vast right-wing conspiracy? Inquiring minds want to know!

  25. Feel free to take some time and read an interview or two instead of working a bit too hard at snarky.

    Joe is clear that he does not want the government to take his money and give it to someone else.

  26. I did read about him. It seems he’s not a licensed plumber after all and he’s got a couple of liens against him to boot. Does that mean he’s disingenuous and/or a deadbeat? American will decide.

  27. I’m pretty sure that Joe is very busy, just now, being interviewed by a wide variety of media outlets. He’ll get back to you in about fifteen minutes….

  28. Yesterday
    Stuarts Draft Liberty: $2.69
    Stuarts Draft Shell: $2.79 (I think)

    This Morning
    Stuarts Draft Liberty: $2.65
    Stuarts Draft Shell: $2.59

    According to NBC29’s site, the lowest price in C’ville is the Chevron at Emmett and University at $3.13.

    For those who are mathematically challenged, that’s a $0.54, or 17%, difference.

    I still haven’t received a reply from Tiger Fuel regarding my question of how they considered Stuarts Draft to be a higher volume market than C’ville. I’m guessing I never will.

  29. $2.49 at multiple places in the Short Pump vicinity of Richmond.

    $3.09 at the BP on Monticello Road near 64.

  30. 2.79 at the Shell down 5th Street near I-64 on Sunday. It was 3.10 Friday evening. It’s usually one of the higher ones in town.

  31. I paid $2.38 in West Richmond Sat. AM. In Ivy on 250, it’s posted at $3.49 this AM!!

    Still, all this doesn’t YET answer the question why Charlottesville is priced so high for so long in relation to other markets, large or small. Could the “small market” be relative to miles of driving space rather than volume of gas? Northern Virginians commute all over NoVa to MD; rural areas must drive quite a distance between towns and/or cities. Cville drivers drive in our “metropolitan” area, which covers mainly Albemarle County and immediate neighboring areas. I’m just guessing here but there has to be some reason for this and I don’t buy “what the market bears.” It’s not like this is discretionary spending when one needs to get around town. Keep PRESSING, Press!

  32. I’m just guessing here but there has to be some reason for this and I don’t buy “what the market bears.” It’s not like this is discretionary spending when one needs to get around town. Keep PRESSING, Press!

    Why is it so hard to believe that gas companies charge what will get them the most profit?

    It doesn’t matter if it’s discretionary to you or not.

  33. From yesterdays Progress:

    Officials with Charlotte-sville’s three fuel distributors did not return a call for comment Monday. Tiger Fuel Co. dominates the local market, providing fuel to 12 of its own service stations and to 100 independent retailers. Virginia Oil Co. operates 17 company-owned pumping stations and distributes to 20 independent dealers. GOCO Oil Co. has four local service stations.

    One reason that the local prices have exceeded those elsewhere in Virginia is that the Charlottesville area has only two major fuel distributors. As a result, there is little competition to drive down prices.

  34. Even with two competitors, prices would go down absent collusion. Assuming they are both getting good prices upstream. Maybe it’s mind-meld collusion.

  35. In a free market system. YOU the consumer have the right NOT to make purchases at prices you don’t like. Therefore, DON’T buy gas at the higher prices. By doing so, you are only reenforcing those prices. By not purchasing, you will force them lower their prices. At the current prices, you will still save money by going to a station with lower prices.

  36. Steve, in a free world, YOU the human being, have the right NOT to breath if the air doesn’t smell good. Therefore, DON’T breath.

  37. Majunga, that was a stupid comment. Steve is right, you can shop for gas at other outlets. Sam’s is almost always the cheapest but you can buy gas when you drive out of area and buy less while in the Cville area.

  38. Kinda related, but I’ve found that if you are in the unfortunate situation where you must buy heating oil that Southern States is just about the cheapest place to get it. Also, in times where the market price dropped, theirs dropped quicker than Tiger Fuel (but I did find that Tiger fuel would match the price to keep my business).

  39. Majunga, I can only assume by your comment that you believe in paying higher prices when you don’t have to. However, not all of us have money that can be thrown away.

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