Where's Gas Cheaper? It's Relative

A customer fuels his car at a gas station. i i

Geography often affects what you pay at the pump. The reason has to do with air quality, taxes, subsidies and sometimes transportation. Karen Bleier/AFP/Getty Images hide caption

itoggle caption Karen Bleier/AFP/Getty Images
A customer fuels his car at a gas station.

Geography often affects what you pay at the pump. The reason has to do with air quality, taxes, subsidies and sometimes transportation.

Karen Bleier/AFP/Getty Images

Gasoline prices can vary widely from place to place. What seems expensive in Tucson, Ariz., can seem downright cheap just up the road in Phoenix. In fact, that's a good example of how geography often affects what you pay at the pump.

At a Circle K gas station in Phoenix, a gallon of regular unleaded sells for $4.09. As he fills up his car, Brendan Locke is amazed at the cost and recalls some not-so-long-ago good old days.

"I'm 33. Ten or 15 years ago, it was 98 cents a gallon," he says. "Ten to 12 years later, it's jumped up this high. It's just not right."

But change is in the wind as we hit Interstate 10 and head south toward Tucson, 120 miles away.

Driving is how westerners get around. It's a land of long distances and not many mass-transit choices. Today, we're on a two-hour journey to find some cheaper gas.

As we roll into Tucson, there it is. The location is another Circle K — this one at the corner of Broadway and Cherry. The price of regular unleaded: $3.82 a gallon, 27 cents cheaper than in Phoenix. In fact, at the moment we arrive, Tucson has the cheapest gas in the United States.

"Well, I feel fortunate then. I won't complain as much," says customer Ashley Tobin.

At $3.82, however, it is still expensive enough that Tobin chooses to fill the tank of her small sport utility vehicle only halfway.

Tobin says she doesn't know why Tucson has the cheapest gas in the country.

"Maybe it's cheaper to transport the gas here?" she says. "I have no idea."

It's not transportation. Phoenix and Tucson both get their gas from the same place: a pipeline running from Texas and the Gulf Coast. The fuel is delivered to huge holding areas called tank farms in each city. That's where the difference emerges.

It starts with Phoenix's hazy air. To cut down on air pollution, the federal government requires Phoenix stations to sell "clean burning gas," or CBG, which costs more.

"Because Tucson doesn't require the use of CBG, the city is basically supplied with a sub-octane conventional fuel," which costs less than conventional fuel, says Andrea Martincic of the Arizona Petroleum Marketers Association.

Translation: Tucson doesn't have Phoenix's air problems, so it can start with the cheapest fuel around, instead of a special blend.

"And then, it's blended with a 10 percent ethanol," Martincic says, "which brings the octane back up and helps the fuel burn cleaner with the oxygenate added."

The ethanol costs less because it is subsidized by the federal government.

The reason the price of gas varies so much from place to place has to do with air quality, taxes, subsidies and sometimes transportation. The retailers are a minor factor in setting the price. That's because they make pennies per gallon.

Right now in Tucson, however, stations are losing pennies per gallon because of competition. If it weren't for their convenience stores, mechanic shops and assorted other ways of making money, many might be out business.

Having the lowest gas prices in the country is good for PR for Tucson, Martincic says.

"I'm tickled the media are doing stories on low gas prices, because oftentimes, I'm talking about high gas prices," she says.

Well, let's not get carried away: At $3.82 a gallon, we're not talking about low gas prices, just the lowest gas prices in the country — for now.

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