Gas prices

Fill up before going to Tahoe
Having the highest priced gas in the lower 48 states shouldn’t affect tourism to the South Lake Tahoe area this summer. But there is little hope for substantial price drops anytime soon.

According to an American Automobile Association study released July 19, prices averaging $2.76 a gallon in South Lake Tahoe were the highest in the continental United States. The Chevron on Lake Tahoe Boulevard has the second highest gas price in the state of California at $2.85 a gallon. The 7-Eleven and Mobil on Lake Tahoe Boulevard and Swiss Mart on Emerald Bay in South Lake are also listed among the top 15 highest gas stations in California.

“Though high prices are aggravating to consumers, there should not be a significant impact,” said Sean Comey, spokesman for AAA of Northern California. “A trip from San Francisco to South Lake, roundtrip, should only cost about $5 more [in gas] than it did last year.”

He says one of the main reasons gas prices are so high is because crude oil prices are very expensive. This usually leads to a corresponding increase with retail prices. The second reason for high prices is high demand, which usually increases during the summer months due to high travel.

“The good news is that gas prices seem to be stabilizing or coming down gradually,” Comey said. “And they should be reducing more after Labor Day.”

UNR economics professor Tom Cargill says the reason for high gas prices is, “a combination of economic growth and increased demand coming from China and India.”

China and India are rapidly growing countries with increasing demand for oil, so the United States is competing with these countries for resources. In the ‘70s, gas prices jumped a lot higher than they have now, and our economy was not in good shape then either, Cargill said.

“We just have to let prices go up, and the people will adjust,” Cargill said. “People can adjust because income has gone up.”

Cargill says a big reason that South Lake Tahoe has high gas prices is that petroleum retailers know that residents of the upscale community will pay. “I don’t think this is a matter of the cost of shipment. It’s what the market allows and encourages.”

He says gas stations set their prices high because they know they are in a market with little competition that has customers who aren’t very price conscious or price sensitive and who have high incomes. Because of this, retailers know they can make their prices higher and adjust profit margins accordingly, Cargill explained.

“If a family drives to South Lake from San Francisco, they will have to fill up their tank before they leave,” Cargill said. “And is unlikely that they will drive down to Carson City to try to get gas three cents cheaper.”

However, while visitors may not do so, locals do. The Tahoe Daily Tribune found some residents who drop down into Carson City for shopping trips and wait until then to buy gas. Barton Memorial Hospital technician Maryann Metzger said she fills up at Costco or Wal-Mart in Carson: “Every little bit helps. We go to Costco as much as possible.”

The high prices in South Lake Tahoe have been documented not just by AAA but also at and The price per gallon reached $3.17 in South Lake Tahoe at the beginning of April.

Things aren’t much better in the rest of the lake basin, and the high prices may be affecting more than just driving habits. The Bonanza on the north shore reports that Meek’s lumber yard charges a $5 gas surcharge for deliveries, and Bonanza Produce requires a minimum order before it will deliver.