Arizona Attorney General's Office Gasoline Retailer Survey by nwv14113

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									Arizona Attorney
General’s Office:
Gasoline Retailer

                          Prepared by:

 Kristi K. Hagen, M.A., M.A.                    Anne Mottek-Lucas
 Principal Investigator                           Co-Investigator

                        Taggart L. Kountz
                        Project Manager

              Social Research Laboratory
                  Northern Arizona University
                       P.O. Box 15301
                   Flagstaff, AZ 86011-5301
                        (928) 523-1515

                          April 2005
Arizona Attorney General Gas Retailer Survey

I. Methodology

The Arizona Attorney General’s Office created and distributed a survey to every Arizona
gas retailer in the state for a total of approximately 1,200 stations via mail June, 2003.
The completed surveys were provided to College of Business faculty at Northern Arizona
University. Faculty contracted with the Social Research Laboratory to organize, code,
and enter all information from the surveys into a dataset. Statistical Package for the
Social Sciences (SPSS) software was used to develop a dataset, codebook and summary
of the surveys (see Annotated Survey).

Survey Collection
From the 1,200 surveys that were distributed by mail, 320 completed surveys were
returned. Three respondents proved to not represent gasoline stations, to refuse to
respond, or to have gone out of business, resulting in 317 valid survey responses. The
total response rate for this study is 26%.

Survey Instrument
The survey consists of ten items, each with several follow-up queries within the item (see
Annotated Survey). Overall, the survey had forty-five separate queries. The total
number of respondents in each frequency table varies due to missing responses (e.g.,
respondent did not fill out or answer the question). The reasons for missing responses are
generally unknown, though a few survey responses were skipped due to lack of available
information or privacy.

Data Coding
All survey responses were counted and organized into groups. The majority of surveys
were individual surveys representing individual respondents. Sixty-seven of the surveys
had a respondent who owned more than one gas station. In one survey, forty-six stations
were represented by one respondent. This survey was entered as forty-six different
survey responses, representing forty-six different stations.

The first items of the codebook are the respondent’s number, name, station, address, city,
state, and zip code. The rest of the items of the codebook parallel the items of the survey.
The different responses for question one, for example, are listed as “Q1aOwner” and
“Q1bOwner.” “1a” and “1b” refer to the parts of the first survey question, on ownership.

The codebook was then programmed into SPSS, and the data from the surveys were
entered into SPSS. When there were surveys with illegible handwriting, spelling, and
grammar, a second and usually third opinion from other researchers was obtained. For
“Q1aOwner,” when respondents would mark both owner and manager, “owner” was
coded. For “Q2aStat,” when respondents would mark both “Independently Owned and
Operated” and one of the other options, the other option was coded. For “Q8eMid,”
some respondents would write “blend” instead of a monetary value – blend refers to a
mix of Regular and Premium, so the average of those two values would be coded.
Surveys often indicated corporations such as Arco Am/Pm in different ways. The coded

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Arizona Attorney General Gas Retailer Survey

information was made consistent so that, such as in Arco Am/Pm, responses such as BP,
BP West Coast, Arco, Am/Pm, and Arco Am/Pm were all put under the same title (Arco
Am/Pm, Chevron/Texaco, Conoco Phillips, and 7-Eleven). The exception to this is
“Q3bBrand,” the question on what a station is branded as.

Limitations of Study
In addition to illegible handwriting, there were several limitations raised with the
management and interpretation of the survey data. Some respondents gave answers for
mutually exclusive items, such as “Q2bStat” and “Q2cStat” (“If Corporation Owned, by
which corporation” and “If Franchised or Leased, from which company?”). There was
no way to decipher exactly what the respondents meant, so the data were coded as
written. Due to the low response rate, the results should be interpreted cautiously and
considered primarily descriptive in nature.

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Arizona Attorney General Gas Retailer Survey

II. Executive Summary                                                Figure 1. Are you owner or the
                                                                      manager of this gas station?
When asked if the respondent to the survey
was an owner or a manager, 71% of those who
responded said they were the owner (N=180),
and 29% said they were a manager (N=74).
Of the 63 that did not respond, 46 indicated
that the owner is “Diamond Shamrock                                         Owner,
Refining and Marketing Co., and Affiliate of
Valero Energy Corp.,” and ten indicated that
the owner is “Costco Wholesale.” Thirteen of
those who responded as “manager” indicated
“Shell Products U.S.” as the owner, and six of
those who responded as “manager” indicated “Thurland Reay Family Investment Co.”
The rest of the responses to “If you are not the owner, who is?” are recorded in the
Appendix (see Appendix C).

     Figure 2. Type of Station                             The retailers were then asked “Is your
                                                           station: Independently Owned and
                                                           Operated, a Corporation, Franchised,
                                      Franchise, 9%
                                                           or Leased.” Though a large number of
                                                           retailers indicated that they were
                                          Leased, 8%
    Corporation,                                           independently owned and operated
                                                           (44%, N=134), or a corporation (39%,
                                                           N=120), only 9% indicated that they
                                                           were franchised (N=28) and 8%
                                                           indicated that they were leased (N=25).
                                                           The names of the corporations and
                    44%                                    companies for those stations that were
                                                           corporate can be found in the Appendix
                                                           (see Appendix D); companies of
                                                           franchised or leased stations are listed
                                                           in the Annotated Survey section.

Retailers were asked if the                           Figure 3. Is the gasoline sold at your station
gasoline at their stations was                                   branded or unbranded?
branded or unbranded. About
three-quarters of retailers
indicated that they were branded                                 Unbranded,
(74%, N=229) and only one                                          26%
quarter indicated that they were
unbranded (26%, N=82). All                                                     Owner,
franchised and leased stations are

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  Arizona Attorney General Gas Retailer Survey

                              Figure 4. If branded, which brand?
                                                                            If the gasoline sold was
                           If unbranded, which gasoline company             branded, the retailer was
                                   supplies your gasoline?                  asked to list which brand. Of
                  Bradco 0
                              6                                             those who responded, the
       Union Distributing 0    7                                            most frequently cited brand
           Phoenix Fuels 0
                                                                            was Chevron-Texaco, at 84

                    Citgo 0     8
                                             Unbranded                      different stations. Diamond
            Arco Am/Pm    0      9           Branded                        Shamrock was second most
                    Shell 1         18                                      frequent, cited 46 times.
          Conoco Phillips   2          22
                             3                                              Exxon Mobil was indicated
            Exxon Mobil                    33
      Diamond Shamrock 0                          46                        33 times, Conoco Phillips 22
         Chevron-Texaco      3                                    84        times, Shell 18 times, Arco
                          0        20       40        60       80      100  Am/Pm nine times, and Citgo
                                        Number of Stations                  eight times. Other various
                             (Stations of unbranded fuel may use            brands were mentioned eight
                                       multiple companies)                  times collectively. Of those
                                                                            who said their gas is
  unbranded, 16 respondents said they bought their gas at Phoenix Fuels, and seven said
  they use Union Distributing
  Company. The other companies                                  Figure 5. How long has this company provided
                                                                           you gasoline (in years)?
  indicated had even less
  representation (see Appendix E).                       35 to 42    2
                                                                                  30 to 35           5
  When retailers were asked how                                                   25 to 30       3
  long their company has provided

                                                                                  20 to 25
  gas, only half of them responded
                                                                                  15 to 20                        20
  (N=166). Responses ranged from
  .1 years (two weeks) to 42 years,                                               10 to 15                         22
  with the most common response                                                    5 to 10                                              51
  “two years” and the average                                                          <5                                                    57
  response “nine years.”
                                                                                             0       10      20         30   40   50         60
        Figure 6: With which company does                                                                    Number of Stations
           your station have a contract?

                           Other                                              27        Of retailers who were asked if they had a
                                                                                        contract with their gasoline suppliers,
                         Win Oil             5
                                                                                        55% indicated that they do (N=162), and
                    Exxon Mobil              6                                          45% indicated that they do not (N=130).

                    Arco Am/Pm                   7                                      Of those who do have contracts, 27 have
                                                                                        contracts with Chevron-Texaco, 13 have
              Union Distributing
                                                                                        contracts with Arizona Fuel Distributors,
                    Phoenix Fuels                     10                                12 have contracts with Conoco Phillips,
Arizona Fuel Distributors                                  13                           ten have contracts with Phoenix Fuels,
                                                                                        nine have contracts with Union
                  Chevron-Texaco                                                  28
                                                                                        Distributing, and seven have contracts
                                    0    5       10        15   20   25           30    with Arco Am/Pm. Other suppliers were
                                        Number of Stations

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  Arizona Attorney General Gas Retailer Survey

  indicated less often than these (see Appendix G). Retailers with contracts were asked
  what their contracts say concerning “the price you pay for gasoline” as well (see
  Appendix H).

  The majority of retailers said that they decide how much to charge customers for gasoline
  (89%, N=273), and only 11% said that someone else makes that decision (N=34), citing
  various companies for who did decide (see Appendix I). They were then asked “If you
  decide how much you will charge for gasoline, how do you make that decision?”
  Respondents often listed more than one factor. Of the 261 retailers that responded, 186
                                                      mentioned competition or the market
            Figure 7. What contracts say about how
                                                      as a factor, 91 mentioned cost as a
                   companies charge retailers.
                                                      factor, 73 mentioned using a margin
                                5                     or profit, four mentioned volume, and
                                                      three other factors were mentioned
                                                      once each (see Appendix J for
Corporation/Cannot                                    verbatim responses).
 All Done throught          4
   the Company                                               Of retailers who were asked “Have
                                                             you had any outside pressure to raise
Based on Rack (and          4
                                                             or lower the price you charge for
                                                             gasoline?” about one quarter
     Margin over                    7
    Company Cost
                                                             responded yes (24%, N=71), and
                                                             three-quarters responded no (76%,
   Based on Public                               12          N=230). Seven percent of those who
     Index, Opis
                                                             said “No” explained further (N=16),
                     0      5           10            15     while 99% of those who said “Yes”
                                                             explained further (N=70) (See
                         Number of Stations                  Appendix K for verbatim responses).

                                                      Retailers were then asked to give an
  “Estimate of average monthly throughput (gas sold) for Diesel, Regular, Mid-Grade, and
  Premium (in gallons).” Table 1 shows the mean, median, and range of retailer responses.
  The number or respondents for each type of fuel is different; the missing responses are
  presumably those retailers who do not sell Diesel, Regular, Mid-grade and/or Premium.
  The range in each case is very close to the maximum number of gallons, because one
  station claimed the minimum scores: 34 gallons of Diesel throughput, 40 gallons of
  Regular, and ten gallons of Mid-Grade and Premium each.

               Table 1: Estimate of Average Monthly Throughput (gas sold) in Gallons
                        Diesel              Regular         Mid-Grade              Premium
         Mean           31,886              100,894           13,161                 14,613
        Median          8,000               70,000            10,000                 10,000
         Range         652,061              684,058           45,615                 145,273
           N=            129                  283               225                    260

  For Diesel throughput, only 40% of retailers responded (N=129), with a range of 652,061
  gallons and a mean of 31,886 gallons. For Regular, 89% of retailers responded, with a

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Arizona Attorney General Gas Retailer Survey

range of 684,058 gallons and a mean of 100,894 (N=283). For Mid-Grade, 71% of
retailers responded (N=225), with a range of 45,615 gallons and a mean of 13,161
gallons. For Premium, 82% of retailers responded (N=260), with a range of 145,273
gallons and a mean of 14,163 gallons.

 Retailers were then asked if their throughput (gas sold) amounts had changed recently –
 29% responded “Yes” (N=73) and 71% responded “No” (N=178). Those who responded
 “Yes” were asked to describe how. Thirty-five retailers indicated that the volume of gas
 had gone down (not including four that had gone out of business), and thirteen retailers
                                                 indicated that the volume of gas sold had
                                                 gone up. Seventeen retailers cited
      Figure 7. If your throughput amounts
                                                 problems in competition, seven retailers
           have changed recently, how?
                                                 cited problems with increased prices, six
                                  Didn't Say
                                                 retailers mentioned shortages or
                                  Volume Up      unavailable fuel, and five retailers
    Favorable Season         4                   mentioned “hypermarketers” as the cause
                                  Volume Down

 Hypermarketers Issue
                                                 of their problems. Of those who had an
                              5                  increase in volume, six mentioned pricing
Shortages/Unavailable                            as being a factor and four mentioned a
        Fuel                    6
                                                 favorable season (see Appendix L for
         Pricing Issue
                              5 6                verbatim responses).
      Closed due to
      Competition         4                    Gasoline retailers were then asked to list
                      1                        how much they spent on gasoline per
      Competition   2
                                               gallon and how much they sold gasoline
                  0    5     10       15    20 for. To allow for comparisons, both cost
                      Number of Stations       and sell prices were asked for “Today’s
                                               Date” (N=248) and “Same Date Last
                                               Year” (N=153), which the retailers would
                                               fill in. Dates for Today’s Date ranged
from 4/1/03 to 9/18/03, and for “Same Date Last Year,” “4/1/02 to 9/18/02.” The mean
date for “Today’s Date” is 6/8/03 and the median date is 6/06/03. For “Same Date Last
Year,” the mean is 6/10/02 and the median is 6/9/02.

Retailers first listed their “Today’s Date” buying cost of Regular Unleaded (N=265),
Mid-Grade (N=179), Premium (N=235), and Diesel (N=124), then listed the same costs
for the gasoline types from “Same Date Last Year” (N=173, 117, 154, and 66,
respectively). In the same manner, retailers listed the price retailers charged customers
for “Today’s Date” (N=276, 220, 250, and 131, respectively) and “Same Date Last Year”
(N=170, 129, 151, and 65, respectively). The mean, median, minimum, and maximum
costs and prices are listed in the table. Note that the response rate for items under
“Today’s Date” is significantly higher than the corresponding response rate for those
under “Same Date Last Year.”

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Arizona Attorney General Gas Retailer Survey

             Table 2: Prices Retailers Pay and Charge for Today’s Date/Same Date Last Year
   Prices Retailers Pay (for
                                           Regular                Mid-Grade                Premium
   “Today’s Date”/“Same                                                                                              Diesel
                                           Unleaded               Unleaded                 Unleaded
      Date Last Year”)*
                      Mean:              $1.471/$1.328          $1.530/$1.367           $1.590/$1.429           $1.392/$1.292
                     Median:             $1.464/$1.309          $1.520/$1.343           $1.594/$1.427           $1.380/$1.285
                  Minimum:               $1.095/$0.955          $1.150/$1.010           $1.215/$1.085           $0.800/$0.710
                  Maximum:               $1.755/$1.650          $1.770/$1.600           $1.799/$1.668           $1.707/$1.599
                          N=                265/173                179/117                 235/154                 124/66
  Prices Retailers Charge*
                     Mean:               $1.609/$1.446          $1.697/$1.517           $1.797/$1.613           $1.589/$1.482
                    Median:              $1.599/$1.399          $1.690/$1.489           $1.789/$1.579           $1.590/$1.450
                  Minimum:               $1.289/$1.110          $1.339/$1.220           $1.399/$1.320           $0.920/$0.830
                 Maximum:                $2.990/$2.990          $2.185/$1.899           $2.299/$2.001           $2.990/$2.990
                        N=                  276/170                220/129                 250/151                 131/65
* Statistics are compared between those of “Today’s Date” and “Same Date Last Year,” the differing statistics divided with a “/”

At the end of the survey, respondents were given the option to leave “Comments.” These
comments are listed in Appendix M (N=179).

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Arizona Attorney General Gas Retailer Survey

III. Annotated Survey
The Arizona Attorney General’s 10-item Gasoline Survey (with 45 sub-items) elicited
317 responses. Responses to these items are detailed below.

CITY: City and Zip. See Appendix A: City.

ZIP: City and Zip. See Appendix B: Zip.

Q1aOwner: Are you the owner or the manager of this gas station?

                         Percent               Frequency (N=)
               Owner     71%                   180
              Manager    29%                   74
                Total    100%                  254

Q1bOwner: If you are not the owner, than who is? See Appendix C.

Q2aStat: Is your station Independently Owned, Corporation, Franchise, or Leased?

                         Percent               Frequency (N=)
  Independently Owned    44%                   134
           Corporation   39%                   120
             Franchise   9%                    28
                Leased   8%                    25
                 Total   100%                  307

Q2bStat: If Corporation Owned, by which corporation? See Appendix D.

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Arizona Attorney General Gas Retailer Survey

Q2cStat: If Franchised or Leased, from which company?

                                              Percent             Frequency (N=)
                           7-Eleven           7%                  4
                       Arco Am/Pm             15%                 8
                    Chevron/Texaco            27%                 15
       Colorado Petroleum Products            2%                  1
                    Conoco Phillips           24%                 13
                 Don and Bute Gona            2%                  1
                       Exxon Mobil            15%                 8
                           JFM Inc.           2%                  1
 Private Don Gurra DBA Texmo Oil              2%                  1
          Southland Corp / 7 Eleven           2%                  1
     Tank, dispero & console leased:          2%                  1
                Commercial Leasing
                            Win Oil           2%                  1
                              Total*          102%                55
*Total Percent may vary from 100% due to rounding.

Q3aBrand: Is gasoline sold at your station branded or unbranded?

                               Percent                  Frequency (N=)
                 Branded       74%                      229
               Unbranded       26%                      82
                    Total      100%                     311

Q3bBrand: If branded, which brand? See Appendix E.

Q3cBrand: If unbranded, which company (or companies) supplies your gasoline for
retail? See Appendix F.

Q3dBrand: How long has this company provided your gasoline (in years)?

                                              Percent             Frequency (N=)
                    Up to Five Years          34%                 57
               Five up to Ten Years           31%                 51
             Ten up to Fifteen Years          13%                 22
        Fifteen up to Twenty Years            12%                 20
    Twenty up to Twenty-Five Years            4%                  6
     Twenty-Five up to Thirty Years           2%                  3
      Thirty up to Thirty-Five Years          3%                  5
          Thirty-Five Years and Up            1%                  2
                               Total          100%                166

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Arizona Attorney General Gas Retailer Survey

Q4aCont: Do you have a contract with your gasoline supplier(s)?

                               Percent               Frequency (N=)
                      Yes      56%                   162
                       No      45%                   130
                    Total*     101%                  292
*Total Percent may vary from 100% due to rounding.

Q4bCont: If yes, with which company does the station have a contract? See Appendix G.

Q4cCont: If your contract discusses the price you pay, what does it say (verbatim)? See
Appendix H.
If your contract discusses the price you pay, what does it say (recoded)?

                                                         Percent      Frequency (N=)
   Retailer pays price based on public index, OPIS       35%          12
          Retailer pays margin over company cost.        21%          7
          Retailer pays based on rack (and freight).     12%          4
    Retailer cost is all done through the company.       12%          4
                   Ask Corporation/Cannot Discuss        6%           2
                                              Other      15%          5
                                             Total*      101%         34
*Total Percent may vary from 100% due to rounding.

Q5aCharg: Do you decide how much to charge for gasoline, or does someone else make
that decision?

                               Percent               Frequency (N=)
              I decide         89%                   273
  Someone else decides         11%                   34
                 Total         100%                  307

Q5bCharg: If someone else decides how much your station charges for gas, who is that
person? See Appendix I.

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Arizona Attorney General Gas Retailer Survey

Q5cCharg: If you decide how much you will charge for gasoline, how do you make that
decision (verbatim)? See Appendix J.
If you decide how much you will charge for gasoline, how do you make that decision?

                                                     Percent              Frequency (N=)
                             Competition             42%                  110
                    Competition, Margin              7%                   18
                   Competition, Volume               0%**                 1
                                    Cost             8%                   21
                       Cost, Competition             20%                  51
             Cost, Competition, Margin               1%                   3
    Cost, Competition, Store Performance             0%**                 1
             Cost, Competition, Volume               1%                   2
                            Cost, Margin             5%                   12
               Cost, Margin, Customers               0%**                 1
                                  Margin             14%                  37
                        Margin, Gas Sold             0%**                 1
                   Margin, Other Factors             0%**                 1
                                 Volume              0%**                 1
                                   Guess             0%**                 1
                                   Total*            98%                  261
*Total Percent may vary from 100% due to rounding.
**Percentages were rounded down to zero (they are about 0.4%).

Q6aPress: Have you had any outside pressure to raise or lower the price you charge for

                                Percent                  Frequency (N=)
                       Yes      24%                      71
                        No      76%                      230
                      Total     100%                     301

Q6bPress: On whether you’ve had any outside pressure to raise or lower the price you
charge for gasoline, please describe how and why (why not) in detail. See Appendix K.

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Arizona Attorney General Gas Retailer Survey

Q7aAvDie, Q7bAvReg, Q7cAvMid, Q7dAvPre: Estimate of average monthly
throughput (gas sold) in gallons.

                                Diesel                     Regular                    Mid-Grade              Premium
            Mean          31,885                      100,894                     13,161                 14,163
          Median          8,000                       70,000                      10,000                 10,000
            Mode          1,000                       75,000                      10,000                 20,000
           Range          652,061                     684,058                     45,615                 14,5273
        Minimum           34                          40                          10                     10
        Maximum           652,095                     684,098                     45,625                 145,283
   Frequency (N=)         129                         283                         225                    260

Q7eGas: Have your throughput (gas sold) amounts changed recently (including supply

                                 Percent                    Frequency (N=)
                        Yes      29%                        73
                         No      71%                        178
                       Total     100%                       251

Q7fGas: If your throughput (gas sold) amounts changed recently (including supply
shortages), please describe how (verbatim). See Appendix L.
If your throughput (gas sold) amounts changed recently (including supply shortages),
please describe how (recoded).

                                                 Percent                                          Frequency (N=)
                                                 Volume          Volume          Neither          Volume     Volume    Neither
                                                 Up              Down            Specified        Up         Down      Specified
               (Reason Unspecified)              2%              25%             0%               1          16        0
                        Competition              0%              16%             2%               0          10        1
                            Demand               2%              2%              0%               1          1         0
        Favorable Season (Price up)              8%              0%              0%               5          0         0
                     Hypermarketers              0%              8%              0%               0          5         0
                                Price            5%              5%              5%               3          3         3
           Shortage, or inconsistent/            0%              3%              8%               0          2         5
   unavailable fuel supply (price up)
       Unable to Compete - Closed                0%              0%              6%               0         0          4
                Competitor bankrupt              2%              0%              0%               1         0          0
                                 Tax             0%              0%              2%               0         0          1
        War (volume up and down)                 0%              0%              2%               0         0          1
                Total (100%, N=63)               17%*            59%*            24%*             11        37         15
*Total Percentages are based off of total N, and may differ from sum of percentages (due to rounding).

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Arizona Attorney General Gas Retailer Survey

Q8aDate: Today’s Date (concerning how much you are currently paying your supplier
for gasoline per gallon).
Q8bDate: Same Date Last Year (concerning how much you were paying your supplier
for gasoline per gallon).
Q9aDate: Today’s Date (concerning how much you are currently charging your
customers for gasoline per gallon).
Q9bDate: Same Date Last Year (concerning how much you were charging your
customers for gasoline per gallon).

                         Today’s Date –            Last Year –              Today’s Date –                 Last Year –
                        Paying Supplier          Paying Supplier         Charging Customer             Charging Customer
           Mean         06/08/2003               06/10/2002              06/08/2003                    06/10/2002
         Median         06/06/2003               06/09/2002              06/06/2003                    06/09/2002
           Mode         06/09/2003               06/09/2002              06/09/2003                    06/09/2002
       Minimum          04/01/2003               04/01/2002              04/01/2003                    04/01/2002
       Maximum          09/18/2003               09/18/2002              09/18/2003                    09/18/2002
  Frequency (N=)        248                      153                     250                           145

Q8cReg$, Q8dPReg, Q8eMid$, Q8fPMid, Q8gPre$, Q8hPPre, Q8iDie$, Q8jPDie:
What prices are you currently paying ($) or were paying (P) your suppliers for gasoline
per gallon? (Regular Unleaded, Mid-Grade, Premium, and Diesel)
Q9cReg$, Q9dPReg, Q9eMid$, Q9fPMid, Q9gPre$, Q9hPPre, Q9iDie$, Q9jPDie:
What prices are you currently charging ($) or were charging (P) your customers for
gasoline per gallon? (Regular Unleaded, Mid-Grade, Premium, and Diesel)

  Prices Retailers Pay (for
                                         Regular               Mid-Grade               Premium
  “Today’s Date”/“Same                                                                                          Diesel
                                         Unleaded              Unleaded                Unleaded
     Date Last Year”)*
                     Mean:            $1.471/$1.328          $1.530/$1.367          $1.590/$1.429          $1.392/$1.292
                    Median:           $1.464/$1.309          $1.520/$1.343          $1.594/$1.427          $1.380/$1.285
                     Mode:            $1.449/$1.309          $1.489/$1.339          $1.529/$1.369          $1.349/$1.235A
                     Range:           $0.660/$0.695          $0.620/$0.590          $0.584/$0.583          $0.906/$0.809
                 Minimum:             $1.095/$0.955          $1.150/$1.010          $1.215/$1.085          $0.800/$0.710
                 Maximum:             $1.755/$1.650          $1.770/$1.600          $1.799/$1.668          $1.707/$1.599
                         N=              265/173                179/117                235/154                 124/66
  Prices Retailers Charge*
                     Mean:            $1.609/$1.446          $1.697/$1.517          $1.797/$1.613           $1.589/$1.482
                    Median:           $1.599/$1.399          $1.690/$1.489          $1.789/$1.579           $1.590/$1.450
                     Mode:            $1.599/$1.339          $1.699/$1.439          $1.799/$1.539           $1.599/$1.399
                     Range            $1.701/$1.880          $0.846/$0.679          $0.900/$0.681           $2.070/$2.160
                  Minimum:            $1.289/$1.110          $1.339/$1.220          $1.399/$1.320           $0.920/$0.830
                 Maximum:             $2.990/$2.990          $2.185/$1.899          $2.299/$2.001           $2.990/$2.990
            Frequency (N=)               276/170                220/129                250/151                 131/65
    *Numbers for “Today’s Date,” appearing before the “/”, are compared with “Same Date Last Year,” after the “/”
      Multiple Modes exist. The smallest value is shown.

    Comments: Comments. See Appendix M.

Social Research Laboratory, Northern Arizona University                                                                     14
Arizona Attorney General Gas Retailer Survey

Appendix A: City
   • Alpine                             •      Munds Park (2)
   • Amado                              •      Navajo
   • Apache Junction                    •      Nogales (2)
   • Avondale                           •      Nogales
   • Bellemont                          •      North Rim
   • Benson (3)                         •      NSLC
   • BHC                                •      Oro Valley
   • Bisbee (3)                         •      Page (3)
   • Bowie (2)                          •      Parker (2)
   • Buckeye (4)                        •      Patagonia
   • Bullhead City (3)                  •      Pearce (3)
   • Casa Grande (6)                    •      Peoria (5)
   • Cave Creek                         •      Petrified Fores
   • Central                            •      Phoenix (43)
   • Chandler (4)                       •      Pima
   • Chino Valley                       •      Pine
   • Clarkdale                          •      Prescott (3)
   • Concho                             •      Quartzsite
   • Coolidge (3)                       •      Queen Creek
   • Cottonwood (2)                     •      Safford
   • Dateland (2)                       •      Salome
   • Douglas (6)                        •      San Carlos
   • Dusleyville                        •      San Luis
   • Ehrenberg                          •      San Simon
   • El Frida                           •      Sasabe
   • Eloy                               •      Scottsdale (7)
   • Flagstaff (10)                     •      Sedona
   • Fort Mohave                        •      Showlow
   • Fredonia                           •      Sierra Vista (3)
   • Gila Bend                          •      Skull Valley
   • Gilbert (7)                        •      Snowflake
   • Glendale (10)                      •      Sun City (3)
   • Globe (3)                          •      Sun City West
   • Goodyear                           •      Sun Valley
   • Grand Canyon                       •      Surprise
   • Green Valley                       •      Tempe (7)
   • Greenehaven                        •      Temple Bar
   • Happy Jack                         •      Thatcher (2)
   • Holbrook (3)                       •      Tonopah
   • Junction                           •      Tonto Basin
   • Kingman (11)                       •      Tuba City
   • Lake Havasu City                   •      Tucson (47)
       (5)                              •      Wickenburg (2)
   • Laveen                             •      Willcox (3)
   • Mammoth                            •      Williams (2)
   • Maranna                            •      Winslow (4)
   • Marble Canyon (2)                  •      Young
   • Meadview                           •      Yuma (3)
   • Mesa (21)                          •      Total Frequency
   • Mission                                   (314)
   • Mormon Lake

Social Research Laboratory, Northern Arizona University           15
Arizona Attorney General Gas Retailer Survey

Appendix B: Zip Code
   • 857 (3)                            •      85236       •   85602 (3)
   • 84054                              •      85242       •   85603 (3)
   • 85003                              •      85248 (3)   •   85605 (2)
   • 85004                              •      85251       •   85607 (6)
   • 85007                              •      85253       •   85610
   • 85008 (2)                          •      85254       •   85614
   • 85009 (3)                          •      85257       •   85618
   • 85012                              •      85258 (2)   •   85621
   • 85014                              •      85260 (2)   •   85624 (2)
   • 85015                              •      85282 (2)   •   85625 (3)
   • 85016 (3)                          •      85283 (2)   •   85632
   • 85018                              •      85284 (2)   •   85633
   • 85019                              •      85292       •   85635 (3)
   • 85020 (3)                          •      85296 (2)   •   85643 (2)
   • 85021                              •      85301       •   85644
   • 85022                              •      85302 (2)   •   85645
   • 85023                              •      85303       •   85653
   • 85024                              •      85304       •   85704 (3)
   • 85027                              •      85306       •   85705 (4)
   • 85029                              •      85307       •   85706 (3)
   • 85031                              •      85308 (3)   •   85710 (3)
   • 85032                              •      85318       •   85711 (3)
   • 85033                              •      85323       •   85712 (2)
   • 85035 (2)                          •      85326 (3)   •   85713 (4)
   • 85040 (2)                          •      85333 (2)   •   85714 (2)
   • 85041                              •      85334       •   85716
   • 85043 (2)                          •      85337       •   85718
   • 85044 (3)                          •      85338       •   85719 (5)
   • 85048                              •      85339       •   85730
   • 85053 (2)                          •      85344 (2)   •   85735 (3)
   • 85069                              •      85345 (2)   •   85736
   • 85201 (4)                          •      85349       •   85737
   • 85202                              •      85351 (3)   •   85739
   • 85203                              •      85354       •   85741 (2)
   • 85204 (2)                          •      85364 (2)   •   85746
   • 85205 (4)                          •      85365 (2)   •   85747 (2)
   • 85206 (2)                          •      85374       •   85748
   • 85207                              •      85375       •   85749
   • 85208 (3)                          •      85381       •   85750
   • 85210                              •      85383       •   85901
   • 85213 (2)                          •      85390 (2)   •   85920
   • 85215                              •      85501 (3)   •   85937
   • 85219                              •      85522 (2)   •   86001 (2)
   • 85220                              •      85531       •   86003 (3)
   • 85222 (4)                          •      85543       •   86004
   • 85224                              •      85544       •   86015
   • 85226                              •      85546       •   86017 (2)
   • 85228 (3)                          •      85550       •   86022
   • 85231                              •      85552       •   86023
   • 85233 (3)                          •      85553       •   86024
   • 85234 (2)                          •      85554       •   86025 (3)

Social Research Laboratory, Northern Arizona University                    16
Arizona Attorney General Gas Retailer Survey

    •   86028                           •      86305       •   86426
    •   86029                           •      86326 (2)   •   86430 (2)
    •   86036 (2)                       •      86338       •   86442 (2)
    •   86038                           •      86351       •   86443
    •   86040 (4)                       •      86401 (9)   •   86509
    •   86046 (2)                       •      86403 (2)   •   Total Frequency
    •   86047(3)                        •      86404 (2)       (301)
    •   86052                           •      86405
    •   86301 (2)                       •      86406

Social Research Laboratory, Northern Arizona University                          17
Arizona Attorney General Gas Retailer Survey

Appendix C: If you are not the owner, than who is?
   • 7-Eleven Corp.                                       •   Mitch Vuksanovich
   • Alisaad (3)                                          •   Mormon Lake Properties LLC, Forever
   • Alisaad & Saad Saad (3)                                  Resorts
   • Andy                                                 •   NPS
   • BP West Coast Business Uni                           •   Ramzi Simon
   • Colorado Petroleum Products                          •   Randy Mintzmyer (I'm the dispatcher)
   • Conoco Phillips                                      •   Reays Ranch Investors
   • David Miller and Robert Gosnell                      •   Robert Finley
   • David Ohansian                                       •   Sam Wiggins
   • Diamond Shamrock Refining and                        •   San Carlos Apache Tribe
       Marketing Co, and affiliate of Valero              •   Seven Resorts Inc.
       Energy Corp. 6000 N. Loop 1604 W                   •   Shell Products U.S. (14)
       San Antonio, TX 78249 (46)                         •   Ted Saylour
   • Estrella Mercantilello                               •   The City of Bisbee
   • Fieldon T. Cooley. (3)                               •   The City of Sierra Vista
   • Gasoline Manager at our Corp Office                  •   The Community
   • I am the Gasoline Buyer for Costco                   •   Thurland Reay Family Investment Co.
       Wholesale in the U.S. (10)                             (6)
   • Jim Dottling                                         •   Trejo Investments
   • Jim Idsardi                                          •   Tucson Airport Authority
   • Jimmy Haslam                                         •   Tucson Truck Terminal, Inc.
   • L&W Investments Inc                                  •   US Postal Service Owned
   • LLC David Maule-Finch & Dennis                       •   Xanterra Parks & Resorts (2)
       Gurmeg                                             •   Total Frequency (120)
   • Maverick has numerous shareholders

Social Research Laboratory, Northern Arizona University                                         18
Arizona Attorney General Gas Retailer Survey

Appendix D: If Corporation Owned, by which corporation?
   • 22k Inc. DBA West Olive Exxon                    •   MRNS Inc
   • 7-Eleven                                         •   MV Enterprises Inc.
   • Al White Ent Inc                                 •   Pilot Travel Center, LLC
   • Alvarez Auto Center, Inc.                        •   Puchi Foods Inc.
   • Aramark Sports and Entertainment                 •   R&D Texaco Inc
       Svcs.                                          •   Reays Ranch Investors
   • Arco Am/Pm                                       •   RIVI LLC
   • Bennett Oil Co.                                  •   S & N Markets Inc.
   • Bhaji Inc.                                       •   San Carlos Apache Tribe
   • Bodrmrt, Inc.                                    •   Sandpoint, Inc.
   • Border Express Inc.                              •   Sasabe Store, Inc
   • Bowlin Travel Centers, Inc.                      •   Satguru Entp. Ltd
   • Bradco Inc.                                      •   Seven Resorts Inc. (2)
   • Cavaliers Univ. Food Market, Inc.                •   Shell (14)
   • Cave Creek Enterprises Inc.                      •   Silco Oil Co.
   • Chevron/Texaco (2)                               •   Southwestern Petroleum Inc.
   • CMD Inc.                                         •   Sung and Sung Inc.
   • Conoco Phillips (2)                              •   Sunraj Investments Inc.
   • Copa Inc.                                        •   Sunsite Transportation Inc. - private
   • Costco Wholesale (10)                                non-profit
   • D&D Properties L.L.C.                            •   Supreme Oil Co.
   • Dalamb, Inc.                                     •   TA Operating Corp dba Travel Centers
   • Dewitt Bros Inc.                                     of America
   • DSRMC (46)                                       •   Thurland Reay Family Investment Co.
   • Ellis Ent.                                           (5)
   • Fena Enterprises LLC                             •   Town & Country Car Wash LLC
   • Forever Resorts                                  •   Tri M Mini Mart
   • Gas City LTD                                     •   Tucson Airport Authority
   • Hallum Inc                                       •   Tucson Truck Terminal
   • Hensley's Inc.                                   •   Two Brothers I
   • Howard Super Service                             •   Two Brothers II
   • Jaco Oil                                         •   Two Brothers III
   • Lou Man G. Inc.                                  •   Wickenburg Oil Company Inc.
   • Marble Canyon Company Inc.                       •   Xanterra Parks & Resorts
   • Maverick Country Stores, Inc.                    •   Total Frequency (140)
   • Meadview Market, Inc.

Social Research Laboratory, Northern Arizona University                                      19
Arizona Attorney General Gas Retailer Survey

Appendix E: If branded, which brand?
   • Arco Am/Pm (9)                                       •   Shell (18)
   • Beacon (2)                                           •   Sinclair (2)
   • Bell Gas of AZ                                       •   Texaco - AZ Fuel Dist
   • Chevron (44)                                         •   Texaco (39)
   • Citgo (8)                                            •   Union 76 (15)
   • Conoco - Giant Industries, my supplier               •   Union 76, Beneto
   • Conoco (3)                                           •   Union Distributing of Tucson, Petro
   • Diamond Shamrock (46)                                    Reps, Inc.
   • Exxon (18)                                           •   Total Frequency (226)
   • Mobil (15)
   • Phillips 66 (2)

Social Research Laboratory, Northern Arizona University                                             20
Arizona Attorney General Gas Retailer Survey

Appendix F: If unbranded, which company (or companies) supplies your gasoline for retail?
   • Adams Dist., Jankovich Company
   • All American Fuel (Tri-Valley Distributing)
   • AZ Fuel Distributors (4)
   • AZ Fuel Distributors, Bradco Inc.
   • AZ Fuel Distributors, Petro-America
   • Bell Gas of AZ
   • Bennett oil
   • Bradco Inc. (4)
   • Carter Oil, Pro Petroleum Inc.
   • Carter Oil, Trejo, Jenkins Oil
   • Chevron
   • Conoco Phillips with Exxon Gas
   • Exxon
   • Exxon, Tosco, Conoco Phillips
   • Giant (2)
   • Jaco Oil
   • Jankovich Company, Bradco Inc.
   • McHood Oil
   • McNeils & Sons
   • Navajo, Tosco, Total Energy, Chevron
   • No retail
   • Petro-America, Jankovich Company, Supreme Oil Company
   • Phoenix Fuel (13)
   • Pro Petroleum (3)
   • Pro Petroleum, Canyon State, Union Distributing Company
   • Pro Petroleum, Jankovich Company
   • Pro Petroleum, Tucson Fuel, Union Oil, Dunlap (based on lowest quote each delivery)
   • Remax Oil Company
   • Seller's Petroleum Products, Inc.
   • Supreme Oil Company (2)
   • Supreme Oil Company, AZ Fuel Distributors, Petro reps
   • Supreme Oil Company, Carter Oil Co.
   • Supreme Oil Company, Total Energy
   • Texaco Oil, Williamstandard Lines
   • Texmo Oil
   • Total Energy, Pro Petroleum
   • Total Energy, Pro Petroleum, Union Distributing Company
   • Trejo Oil Company (2)
   • Tucson Fuel (2)
   • Union Distributing Company (7)
   • Union Distributing Company, Jankovich Company, Arizona Fuels
   • Union Distributing Company, Woody's, Southern Counties
   • Union Distributing, Canyon State, Tucson Fuel, AZ Petroleum
   • Valero, Conoco, Duke, Tesoro
   • Valero, Tosco, Shell
   • Various (4)
   • Total Frequency (79)

Social Research Laboratory, Northern Arizona University                                     21
Arizona Attorney General Gas Retailer Survey

Appendix G: If yes (to having a contract), with which company does the station have a contract?
   • 7-Eleven (2)                                        • Passmore Gas and Oil
   • Arco Am/Pm (7)                                      • Phoenix Fuel (10)
   • Arizona Fuel Distributors (13)                      • Seller's Petroleum Products, Inc.
   • Arizona Trails Inc.                                 • Shell Oil (2)
   • Bell Gas of AZ                                      • Snowbird Inc.
   • Bennett Oil (2)                                     • Trejo Oil Company (2)
   • Chevron/Texaco (28)                                 • Trejo Oil Company, Apache Fuel Co.
   • Citgo (2)                                           • Tri Valley Distributors
   • Conoco Phillips (11)                                • Tri Valley Distributors, Snowbird Inc.
   • Diamond Shamrock                                    • Tucson Fuel
   • Exxon Mobil (6)                                     • Tucson Fuel, Giant, Conoco
   • Giant (3)                                           • Union Distributing (9)
   • Hallum                                              • Win Oil Co. (5)
   • Jaco Oil                                            • Total Frequency (116)
   • Jenkins Oil

Social Research Laboratory, Northern Arizona University                                         22
Arizona Attorney General Gas Retailer Survey

Appendix H: If your contract discusses the price you pay, what does it say? (verbatim)
   • .02 cents over Bennett Oil's cost & delivery fees.
   • All done through 7 Eleven.
   • As a dealer we are allowed to price as we wish, but prices they charge us are higher then other 76
   • Ask Corporation.
   • Cannot discuss price.
   • Chevron's invoice charge plus 6 cents freight and profit to the supplier.
   • Colorado Petroleum Purchases Spot (best buy) daily.
   • Contract for supply only and major brand sinage and conditions for their needs.
   • Cost according Chevron Branded Gas.
   • Dealer Tank Wagon.
   • Established dealer/retailer pricing in our area.
   • I am not sure I have a written agreement with the jobber who supplies me. Our understanding is
       that my price will be their cost plus 2 cents and costs of transportation.
   • Major oil company rack price, plus .01 cents.
   • Market Pricing.
   • OPI Published price per gallon. Unleaded -.007. Vendor (+/-) merkup/down per gallon. Diesel:
   • Pay the price fax down.
   • Price is: Conoco/Phillips terminal price in effect at the time marketer loads the motor fuels into
       marketers' truck.
   • Prices are based on the public index, OPIS. We pay OPIS low two average less $.0025 per gallon.
   • Rack plus freight.
   • Sell fuel on commission basis.
   • The lowest rack Rate of Phoenix, Las Vegas, Bloomfield.
   • The prices dealer shall pay Chevron for Chevron motor fuels herunder shall be Chevron's prices to
       dealer, as established by Chevron from time to time.
   • They deliver to my location, I pay sellers price to retailer at time of delivery, and the payment is
       LOD or load to load.
   • They provide the price.
   • Tucson Rack, 2 Low Average.
   • When I had a contract - my price was rack pricing plus frieght. (branded)
   • Total Frequency (35)

Social Research Laboratory, Northern Arizona University                                               23
Arizona Attorney General Gas Retailer Survey

Appendix I: If someone else decides how much your station charges for gas, who is that person?
   • 7-Eleven National Gas (2)
   • All rates approved by National Public Service
   • BP West Coast
   • Clark Thompson
   • Comparative study from five different stations
   • Corporate fuel department
   • DM says follow other gas stations
   • Exxon
   • Frank Jakubik, President Tucson Truck Terminal
   • Jaco Oil
   • Larry Davis - Arizona Fuel
   • Len McHenry
   • Matt Hampton, 480-767-0160 (14)
   • Mobil Decision
   • National Gasoline - Kieth Hallowy (2)
   • National Park Service (2)
   • NPS Concessions Dept.
   • Texaco Oil
   • Union Distributing
   • Win Oil Co. - Jeff Pugliano
   • Total Frequency (36)

Social Research Laboratory, Northern Arizona University                                          24
Arizona Attorney General Gas Retailer Survey

Appendix J: If you decide how much you will charge for gasoline, how do you make that decision?
    • 10-20% margin.
    • 10 cent margin.
    • 12-15 cents.
    • 15 cents per gallon over cost.
    • 20% profit.
    • 20%.
    • 25 cents over cost.
    • 7 Eleven Inc. owns the gas and communicates a pricing strategy from Dallas, Texas via computer.
        I either use that strategy or adjust it downward based on street prices.
    • According to market price.
    • According to my competition.
    • Add five or six cents to the cost of my gas.
    • Always tries to have five to seven cents margin on unleaded gasoline and others will follow (10-
        cent-more patter).
    • Area prices generally dictate as customers will drive 20 minutes to save two cents a gallon. But
        when costs go up we'll increase to maintain a five to nine cent per gallon margin despite what
        others might be charging.
    • At least 3% over cost due to credit cards cost me 3% to run most times my profit margin is 3-4%.
    • Base on other stations in the area and cost.
    • Base on the prices of the competition.
    • Base upon my cost and other stations around me.
    • Based mostly on what the corporate stores of my same brand are around me.
    • Based off of pool margin and gallons sold.
    • Based on a Fair R.O.I. and competition.
    • Based on competition and expenses.
    • Based on competition and fear price and gouging.
    • Based on competition Environment and how much it costs to operate business.
    • Based on competition pricing.
    • Based on Competition.
    • Based on competitive environment. (2)
    • Based on competitive pricing.
    • Based on cost and competition. (2)
    • Based on cost. which is 17-18 cents higher than national average plus my competition.
    • Based on Fair R.O.I.
    • Based on how much the market will bear.
    • Based on invoice purchase price.
    • Based on market and Competition.
    • Based on market and margins.
    • Based on meeting our budget.
    • Based on my buying price.
    • Based on my cost and other stations around me.
    • Based on other branches in my area.
    • Based on price as delivered.
    • Based on prices in the market & our internal targets.
    • Based on R.O.I. 75%, Competition 25%.
    • Based on Texaco price to us.
    • Based on volume.
    • Based on what we have to pay for it.
    • Based on what we pay the distributor.
    • Based on wholesale price at time of delivery.
    • Based upon cost of gasoline - competition - cost of doing business.

Social Research Laboratory, Northern Arizona University                                             25
Arizona Attorney General Gas Retailer Survey

    •   Based upon deliverer cost and the three times per week that we survey competition.
    •   Based upon price paid & standard markup.
    •   By competition prices.
    •   By how much wholesale price is and other station prices.
    •   By my wholesale price and the street price of the competition.
    •   By percentage, Approximately 20%.
    •   By price survey off street pricing of competitors.
    •   By the price we pay delivered to Young plus expenses (includes our equipment lease and
        electricity). We have not a profit for two year and had to borrow on our home equity.
    •   By trying to be competitive on the street.
    •   By what we pay for fuel & what other stores are priced at around location.
    •   Certain amt above cost - set pricing policy by us. Competition surveys to review our set mark-up
    •   charge enough to make mortgage payment.
    •   Close to what everyone else is selling for in town.
    •   Common price is 10-15 cents above cost.
    •   Compare the other stations prices and try to keep 1-2 cents lower than those prices.
    •   Comparability study.
    •   Competition - current marketing strategies.
    •   Competition and cost of fuel.
    •   Competition and cost.
    •   competition and rack price.
    •   Competition First - Cost + Average Markup.
    •   Competition prices and cost, usually 15 to 22 cents per gallon markup.
    •   Competition, to the best of my ability. We are usually the first up the last down by dictation of a
        sale price.
    •   Competition. (3)
    •   Competitive environment. (2)
    •   Competitive pressure from other stations is a factor.
    •   Competitive with Flagstaff posted prices.
    •   Consider the competitor price.
    •   Cost +.
    •   Cost and Competition.
    •   Cost and mark up.
    •   Cost and profit = price/gallon.
    •   Cost of fuel and fees, permits, insurance, etc. to be covered by annual gallons sold.
    •   Cost of gas to us.
    •   Cost of operation - small profit, very small after upkeep.
    •   Cost plus.
    •   Cost, competition, volume, etc.
    •   Cost, Competitors, volume history regression analysis.
    •   Cost. (2)
    •   Daily market survey.
    •   Depend on competition in area.
    •   Depends on what price the oil co charges us.
    •   Depends on what we pay for it.
    •   Desired profit per gallon adjusted for market conditions. (2)
    •   Eight to ten cents CPG.
    •   Five cents per gallon.
    •   Five to six cents per gallon after charge card fee and losses from charge card used outside (stolen
    •   Flat mark up cents per gallon.
    •   Four to six cents over cost, try to keep with competition.

Social Research Laboratory, Northern Arizona University                                                  26
Arizona Attorney General Gas Retailer Survey

    •   Gasoline pricing is based solely on competitive pressures & competitor pricing.
    •   I base it on competition (my biggest competition is my own company, Phillips 66) even if I have
        to sell at cost.
    •   I base it on cost and market prices.
    •   I base my decision on market trends, wholesale cost + margin of delivery + profit. Consideration
        is made from monthly expenses (we are full serve) mostly from environmental costs.
    •   I consider our cost and our surrounding competitors pricing.
    •   I determine how much to charge customers for gas ... by looking at the prices set by my near
        competitors, those within approximately a 5 mile radius of my station, and I set a price above my
        cost that I believe is competitive.
    •   I guess.
    •   I have a good idea how much gas I am going to pump in a years time and how much margin per
        gallon I will need to make to satisfy the profit goals. Then, I have to be within the ball park on
        pricing as determined by my competition.
    •   I have a set mark up. I monitor price on every load I get and adjust.
    •   I make my decision to be the cheapest in town.
    •   I need to maintain a specific profit margin, but I'm sometimes forced by competition to reduce that
    •   I price to maximize profits and maintain a competitive posture with my competition.
    •   I receive dealer tank wagon (DTW) price from company.
    •   I try to at least make 10 c over cost which barely covers my cost. There has been times when I've
        had to sell at cost to keep my customers.
    •   I try to make at least 20 cents a gallon. I drive around and check gas prices in my area and adjust
        price accordingly.
    •   I try to stay 1 or 2 pennies above Circle K across the street.
    •   I try to stay around 6 cents / gal on 87 unleaded & I also price according to competition around
        our area.
    •   I work on an average markup of about 10 cents per gallon regardless of cost.
    •   I work on an average of 12 cents per gallon. This is what is needed and pay my bills.
    •   It's based on current cost and competitive surveys that we do 3 times weekly.
    •   It's the owner.
    •   It depends on the price I pay per gallon and competitor's prices.
    •   It depends on the price per gallon & competitors price.
    •   It is based on current cost and competitive surveys that we do 3 times weekly.
    •   It is based on current cost and competitive surveys that we do three times daily.
    •   It is based on current cost and competitive surveys that we do three times weekly.
    •   It is based on our cost (D.T.W.) and what our competition is selling it at. Margin varies from 5 to
        10 cents depending on what the oil company lets us make.
    •   Its based on current cost and competitive surveys that we do three times weekly.
    •   Local comparables.
    •   Local competition.
    •   Local market competition prices or break even, whichever is higher.
    •   Local market conditions.
    •   Local market.
    •   Margin - five to nine cents.
    •   Margin above cost.
    •   Margin market balance.
    •   Mark up the price about 10 cents per gallon.
    •   Market competition.
    •   Market conditions and competition.
    •   Market shopping within Flagstaff market along with reasonable margin.
    •   Market survey of 2-3 mile radius approximately 8 to 10 cents/gallon over cost.
    •   Market.

Social Research Laboratory, Northern Arizona University                                                 27
Arizona Attorney General Gas Retailer Survey

    •   Minimum 10 cent mark-up per gallon, or less depending on Walmart and Safeway's unfair
        competition trying to drive out all small businesses, so they can eventually charge $2-3 per gallon.
    •   My consultant Marion Adkisson and I set price - what the cost is with the gas on hand and how
        much the new load will cost, averaged out.
    •   My decision is based on my laid in price and price of my next load. Price is largely determined by
        what the current market conditions will allow. Most of the time my competition determines price.
    •   Normal markup.
    •   Off of percent.
    •   On average approx. 10 cents per gallon margin - depending on what unbranded units are charging.
    •   On cost.
    •   Other prices on the "street".
    •   Our accounting dept.: charges are based on cost of system operation & profit margin for future
    •   Our competition and street prices determine our selling price.
    •   Our pricing is determined by several factors. Our fuel dock has 3/4 of a mix of double companies
        fuel line - underground & above water, we pay for all HAZ Mat Training & Mart Repair for our
        Dock. One run our current prices at a .72 margin 28%.
        Our retail gasoline prices are based on a number of factors, including the competitors within a
        geographical area. Each day we take a survey of the prices posted by such competitors. These
        surveys, along with other factors, including but not limited to, current costs and inventories,
        provide us with the information necessary to set our retail gasoline prices at each of our stores.
        There are a number of employees who are part of the price setting process set forth above. The
        employees who are typically part of this process include a pricing analyst from our fuel-pricing
        department located in San Antonio, Texas and a field associate from our field management group
        located in Arizona. (46)
    •   Owner [not manager].
    •   Per price delivered and going price in town.
    •   Percent of profit needed to maintain expenses.
    •   Price decision is based on supply and demand, as well as competition from other majors.
    •   Price it a Nickel a gallon.
    •   Price surveys of competitors.
    •   Prices are established by cost, secondary conditions are market conditions/prices & demand.
    •   Prices based on the local market area.
    •   Pricing Fax up and down.
    •   Rack levels, market pricing.
    •   Reasonable mark up within limits of Concessioner agreement with National Parks Service.
    •   Rural area. Try to stay within 20 cents of nearest big town.
    •   See the competition.
    •   Self, but it is dictated by the company - base on competition.
    •   Set standard $.05 Flowage Fee is added to cost (per gallon).
    •   Several factors - current replacement cost - competitive environment - current performance of
    •   Site operation expense. Average in neighborhood.
    •   Six percent added to cost.
    •   Station comparability.
    •   Stay with the price on other exits.
    •   Street price & no less than 6 cents/gal profit to cover costs of credit card charges.
    •   Street price, competition.
    •   Street prices and wholesale costs.
    •   Street pricing.
    •   Target margin based on expected sales, desired, required GP and NP.
    •   The lower my profit margin, the more we can sell. We have loyal customers and that determines
        mostly my price.

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Arizona Attorney General Gas Retailer Survey

    •   The owner decides, Ali Saad. (2)
    •   The owner decides, Jimmy Haslam. Competition.
    •   The owner decides. (3)
    •   Try and make 15-20 cents per gallon IF market will allow, however hard with new Mexico next
    •   Try competitive, try to make a profit.
    •   Try to make 5 or 7 cents (10 cents if lucky) above cost due to much competition on same street
        hard to compete.
    •   Trying to stay competitive with the closest competitors.
    •   Unleaded - cost & delivery + 27 cent profit. Diesel - cost + delivery + 22 cent profit.
    •   Volume and pricing from competing stations around us.
    •   We adjust our prices according to the fluctuation morn cost. (2)
    •   We base our price on the other gas stations and try to stay competitive.
    •   We charge 10 cents over the cost per gallon to outside accounts. Employees get six cents over
    •   We charge as much as competition allows us to. We have to stay competitive with neighboring
        stations. The competition never allows us to make a margin above what is necessary to stay in
        business and normally create a situation with low profit margin.
    •   We decide according to the price quoted to us.
    •   We do price surveys in order to stay competitive.
    •   We have a set profit margin we try to adhere to.
    •   We need 18-19 cents per gallon in Holbrook but never have that. We have to pay discount from 3
        to 3.5% which is 4.31 cents per gallon.
    •   We re-calculate the blended cost of gasoline in our underground tanks each day and look at our
        competitors prices in each market area. We then set a price based on those factors. (10)
    •   We stay mostly in the middle of the average street price.
    •   We try to make 12-15% profit.
    •   We try to make 15-20 cents a gallon. It is not always possible.
    •   We try to make 5 to 6 cents per gallon on unleaded then go up 10 cents for other grades.
    •   We work on a specified margin
    •   What the purchase price is.
    •   What we pay for fuel & what other stores are selling for in location.
    •   What we pay for fuel and what other stores are selling for in location.
    •   Wholesale and Competition.
    •   Total Frequency (269)

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Arizona Attorney General Gas Retailer Survey

Appendix K: On whether you’ve had any outside pressure to raise or lower the price you charge for
gasoline, please describe how and why (why not) in detail.
    • "Indirectly" gas volume is "tied" to rent. Rent gets high if gallon's number's are not met.
    • Always to lower because the people in our town say they are hauling in drums or are going to
         unless gas prices come down - that was until this month when prices started coming down.
    • Another small stations called La Osa Junction has lowered the price and consequently we have
         gone below their price.
    • Before the war customers were upset about high prices. A lot of pressure, however my gas margin
         was <12 cents. I lost $ during this time.
    • Big competitors do not want us around. I have had a lot of trouble.
    • But customers always complain.
    • But it depends on the market and what Arco is selling the gas to us for.
    • But sometimes, my cost is very high. Sometimes they charge me even higher then [?].
    • By bigger gas stations, giving gas below cost.
    • Cannot get too far from the major oil company prices, even at times they are selling at our cost.
    • Chevron has been very aggressive in raising our cost and lags others in lowering costs.
    • Company (Conoco) Sometimes sell gasoline lower street price than I have to purchase from the
         same company.
    • Competition from other stations.
    • Consumers are well aware of other are prices and will tell you directly. Otherwise, business goes
         down if you are even 1 cent higher than the area. Gas is a commodity - based item! But I refuse
         to sell below cost even when Arco enters the area [?]
    • Customer suggestion.
    • Customers always say numbers are too high.
    • Customers are complaining because prices are dropping elsewhere, lesser must be taking
         advantage of the lower cost of the fuel.
    • Customers complain sometimes.
    • Customers.
    • Every day customers ask us to lower price.
    • Everyone wants it lower; how can we operate without making ends meet?
    • Except market conditions/competition. (2)
    • From customers: No to lower prices. Yes to we should increase our price based upon other prices
         on the lake.
    • Gas is being zoned! The customers always pressure the store to lower our prices. South
         Scottsdale has much more reasonable prices then north Scottsdale and we fall on the border line
         with the higher prices.
    • Gas stations in Phoenix are going out of business every day. No one in this city is making money
         on gas. The seven cents I make on fuel does come close to expenses.
    • I'm only 12 miles from New Mexico where prices are 20 cents cheaper. Chevron will not let us
         pull from El Paso.
    • I pay more for gal., because I buy in small quantities - can't compete with branded stations, just for
         customer convenience because there are not many gas stations in our area.
    • I try to stay low as our competition if possible unless my margin gets below 8 cents per gallon at
         which point I begin to lose money. Almost always I can not go quite as low as my competition.
    • If you want to call it pressure when your own oil company builds a station half a mile down the
         street and sell gas at the same price they sell it to me.
    • Just the cost of fuel and the competition.
    • Just trying to compete with other stations on street to stay in business.
    • Lower price, from hypermarkets and company operated stores like Quick Trip, Diamond
         Shamrock, Arco.
    • Lower, when QT, Arco lower their price on street less than my buying price.
    • Marketers in my area are selling product below my wholesale price.
    • Money.
    • Oil companies control pricing through zone pricing.

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Arizona Attorney General Gas Retailer Survey

    •   Only by the customers!
    •   Only competition from Maverick.
    •   Only competitive pressures.
    •   Only for the prices of the competition.
    •   Only from competition.
    •   Only from competitors.
    •   Only from consumers complaining about the high price in Arizona vs. the Midwest.
    •   Only my costs, such as a 20 cent per gallon jump in a 10 day to 2 week period.
    •   Only my wife.
    •   Only pressure would be customers complaining.
    •   Only the pressure I feel from my competition. There have been many times my competition
        usually an unbranded store will sell gasoline for less than I have paid for it.
    •   Only through how the market is in the area. If price decrease, you have to stay competitive. If
        they rise, it depends on how fast our brand (Arco) is raising the cost per gallon.
    •   Only what the market dictates, depending also on what Arco charges us per gallon on a daily
    •   Other than cost, no.
    •   Other than the occasional customer who thinks they have some god given right as an American to
        the world's cheapest gasoline, I have not received any pressure to raise or lower my prices.
    •   People are always complaining of high prices regardless. We actually sell 92 octane and are
        usually $.40 higher than in town.
    •   Pressure is always here. By company owned station, to decide also oil companies will price
    •   Price war with Shell and Mobil in area.
    •   Quick Trips and some others like Costco sells gasoline much cheaper than what we buy at. That
        could be big pressure to lower our price.
    •   Shell feels a station should only make approximately three cents a gallon.
    •   Sometimes local customer is not happy with price, then I try my best to make them happy.
    •   Texaco has recently engaged very regularly in providing gas to my competitors below my cost.
    •   Texaco sells gas cheaper in El Paso 20-25 cents per gal. Texaco will no longer let us Pull from El
        Paso. It's only 50 miles farther than Tucson. But always cheaper!
    •   The only "outside" pressure to raise or lower the price we charge for gasoline is our competitor's
        price. (10)
    •   The pressure is from my customers because they see the other 76 branded stores selling for a
        lower cost. Those stores are all company owned and operated by my supplier Conoco Phillips.
    •   The public, because the branded & company owned stations can sell at cheaper prices.
    •   There are always consumers complaining about fuel price.
    •   They would like us to give it a way so we could sell more gallons, they could care less if we stay
        in business.
    •   This past winter I was given a chance to be in a program to get a lower distrigution price if I kept
        my margin at 6-7 c per gallon. If not I would be charged much higher distribution price. I agreed
        to program though I felt it's not a fair margin.
    •   Though the 7-Eleven contract states that they have the right to set gas prices.
    •   Unbranded price is higher than branded.
    •   We are not the leaders of this product in our town so we follow the same pricing with other
    •   We are strictly told what price to sell for.
    •   We go with the market, we try to match everybody else.
    •   We have been offered price differentias if we dropped to be competitors with unbranded - very hit
        and miss - at their decision each month, week, or day!
    •   We have no alternative. We must follow the laws of the Nat'l Park Services Pricing Policy based
        on a weekly comparability analysis of local and regional comparables.
    •   We have to take in account our cost.

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Arizona Attorney General Gas Retailer Survey

    •   We try to match the market.
    •   We try to price with everybody.
    •   When competition down the road is lower we have to stay competitive.
    •   When Mobil increased our cost we have to go up - when cost reduced we have to go down
        because of competition.
    •   Total Frequency (87)

Social Research Laboratory, Northern Arizona University                                         32
Arizona Attorney General Gas Retailer Survey

Appendix L: If your throughput (gas sold) amounts changed recently (including supply shortages),
please describe how. (verbatim)
    • Arizona put a nine cent tax (now eight cents) on diesel. New Mexico doesn't have tax on pump.
    • Because my price is the lowest price in the area "1459".
    • Business is very slow, we cannot compete with big stations.
    • Can't compete with New Mexico prices or competition than is allowed to pull out of El Paso.
    • Declined 20%.
    • Decrease appx. 15% due to hypermarketers.
    • Delivery gallons amount always higher than the station measuring procedures.
    • Down. (2)
    • Due to new location being built in the area.
    • During recent months we were unable to get fuel supply on a consistent basis - therefore we had
        much less throughput.
    • Exxon Mobil has not had a competitive pricing posture since April '02. I have lost 20% of gasoline
        volume since then.
    • Fuel is now going up again. They say that there is another shortage.
    • Gallonage has declined over past 4-5 years.
    • Gallons sold dropped.
    • Gone down.
    • High price in fuel.
    • Higher percentage of regular 87.
    • Hypermarkets selling below cost has caused a big decrease on throughput.
    • I still cannot get any Mid Grade or Premium, and sometimes Regular.
    • I use to sell $200000 Gallons or more, since the high cost volume keeps goind down and profit is
        also down.
    • Increased as Walmart and Safeway caused a competitor to Bankrupt.
    • Increased tourism and higher market prices in Phoenix metro area.
    • It's summer our business season.
    • It is going down.
    • Just sell less because my price is higher.
    • Less.
    • Loss of approximately 35% of volume due to hypermarkets.
    • Lower volumes than last year.
    • More unbranded competition in area.
    • My sales are declining steadily over the past couple of years.
    • No premium available, & supposed fuel supply shortage.
    • No shortage, have not been competitive in market so volume is down.
    • Our business is seasonal. We pump more gas May through Sept. May 2003, 25118 gallons; Dec
        2002, only 1989.
    • Phoenix had had outages of diesel and gas.
    • Pricing issues. (2)
    • Quick Trip opened across the street. Our gas sales volume has decreased dramatically.
    • Quick Trip opening everywhere.
    • Shortened loads due to supply.
    • Since price increase at wartime, sales have increased about 10%, but dropping again slowly.
    • Slowing down, people not filling up as much.
    • Smith food king open a gas station in front of their store, they sell gas .05-.20c under our cost.
        This has dropped our sales to 1/3 of what they were in the past.
    • Summer sales are higher - boats.
    • Throughput down because of pricing.
    • Throughput has decreased due to hypermarkets selling at or below cost.
    • Too many stations in area volume been going down and so is profit.
    • Too many stations in the market.

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Arizona Attorney General Gas Retailer Survey

    •   Unbranded and licensed branded competitors have a distinct advantage, buying cheaper product.
    •   Up a little for summer traffic.
    •   Volume down.
    •   Volume Dropped - Increased Market Competition. (2)
    •   Volume has decreased.
    •   Volume shrinking due to hypermarketers aggressive pricing.
    •   We are down 12% since January from last year.
    •   We are in the process of installing new credit card accessibility pumps.
    •   We are selling less and less.
    •   We are selling less the past year.
    •   We experienced higher than normal volume due to more competitive pricing.
    •   We had a big increase in sales because we don't inflate our prices because of war or 9/11 situations
        (we don't gouge our customers).
    •   We were forced to close this gas station due to lack of supply in the market from 3/6/03 to
    •   We were forced to close this gas station due to lack of supply in the market from 3/7/03 to
    •   We were forced to close this gas station due to lack of supply in the market from 3/7/03 to
    •   We were forced to close this gas station due to lack of supply in the market from 3/8/03 to
    •   When Texaco supply is at a shortage Texaco's response is to raise gasoline price by 10 cents per
        gallon until the shortage is not a problem. Texaco charges me 10 cents per gallon more so I have
        to charge it to my customers.
    •   Total Frequency (66)

Social Research Laboratory, Northern Arizona University                                                  34
Arizona Attorney General Gas Retailer Survey

Appendix M: Comments
Oil companies are competing with their Dlp's at a lower street price, causing economic eviction. I
owned (leased) a similar site at Alma School and Baseline Mesa. Gallons are dropping due to
competition. Then they are raising due to low volume equaled economic eviction.
My gas prices (costs) are usually within pennies (more in smaller quantities) as the Hopi Truck
Plaza sells regular unleaded for. Short of selling at cost, I can't match their prices. If I had to do
that, I’d just as well go fishing. I believe the oil companies are gauging us.
Our gas retails for less than Flagstaff and we have to pay additional to haul it here to Page.
We are a small company and we do not purchase much each year but we still need to buy permits,
insurance, etc...
We have found in the last two years or so that gas is not worth selling. The big corporations have
their stations in Kingman selling under our cost. Smiths, at one time, was selling Regular
Unleaded 27 cents under, and the TA has sold up to 18 cents under our cost.
Answers to questions seven, eight, and nine are private. The information is available to anyone
with good reason but not to the tail that's trying to wag the dog.
We have to have six different diesel reports. Many are getting the same information on different
reports. I also think we could use just the ebg (?) gas all year because it becomes very hard for
independent minimarts to obtain fuel at a fair price because of the shortages. Refineries cannot
keep up, so please give the small business owners [cut off].
I think that the major oil companies conspire to make fuel short supply and then raise prices - all
holiday prices increase from six to ten times the gallon.
We wonder why some stations (i.e., Rabelle Mkt) sell so cheap and yet we pay what they sell it
for. We notice that prices change when holidays come. It seems unfair for companies to have this
power. Can you control this?
You can't control cost as attorney general. The gas companies have too much power. New
Mexico is selling gas for 1.219. It cost me 1.485. Arizona has an 8 cent diesel tax so truckers fill
up in New Mexico to beat it.
We are a full serve gas station. We only have a 3000 gallon unleaded tank and a 2000 gallon
premium unleaded tank. Sonoita Shell is a self serve gas station and they are at 1.79 regular right
now, 1.99 premium.
We have all four of our regular suppliers quote each time we need to buy fuel, and then choose the
lowest price. Although our prices are now lower than Tucson and Phoenix, there are times when
prices at other stations are lower than what we have to pay to the distributors.
There is very little competition in buying unbranded gas so small stations have to pay too much.
It's hard to find anyone to fix my pumps because I am not branded.
Being a low volume dealer, our costs/sell prices are not always in sync with current market.
We are one of the last small full serve stations. When we started in 1962 Buckeye had 26 full
serve stations. Now we have 46 stores and 2 service stations.
The state tax per gallon is much to high at 19 cents (total) per gallon.
Comparing gas prices today to the same time last year and trying to derive meaningful
information is useless. The gas business is dynamic with many forces affecting the price in gas.
Last year we had the big forest fire and we were competing with the new “Super Walmart”; this
year we had the war and it goes on and on. You have to be in the gas business to realize the
pressure and forces that affect gas pricing. I try to make $24,000 a year in gas. Some years I
make more, some years I make less. Right now I am making good money but in January I only
made $1000 and in February I only made $264, so now I am making up for those months.
The State of Arizona should have a mandatory price commission for every retailer and supplier.

I do not have prices for last year handy.
Normally the big corporation stations sell their fuel for less than we pay for it. (but lately [in the
past 2-3 months] we were selling our fuel for 20 to 30 cents a gallon less than them. Gouging

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Arizona Attorney General Gas Retailer Survey

Grocery stores should not be allowed to take a loss on gas to sell more food. It confuses the
consumer and causes problems in the fuel market.
I don't understand why prices are going up and profits are going down. I've been told by my sales
representative that every major gas distributor has met with the governor and she clearly
understands what is going on and understands that profits in retailing gasoline are not what most
people think. Why are so many major gas chains pulling out of the Arizona market? Why are oil
companies being bought and sold in this market if they are not making money? As an
independent business, I am struggling to run an honest business and stay open, yet the government
and media continue to insinuate that I am taking advantage of the public. Why are so many
dealers closing and walking away from the business? Why if we were taking advantage of the
public was there a shortage when the price reached $2.00 a gallon? Either the oil companies are
making a lot of money or they will go down with all of the small business owners as we cannot
survive on an eight to ten cents margin on gasoline. Please feel free to call me if you don’t
understand any of my points or any information.
Thank you for looking into the oil company and independent dealer situation. We really do not
expect a lot to happen with the investigation. I have almost 35 years dealing with the oil
companies. They pretty much do as they please. A letter to the oil company dealers did bring
lower wholesale prices to us. As a rule, we are lucky to break even on selling fuel. It’s getting to
be a daily struggle to keep her life investment from going into a negative. We will never see fair
profits again, but we would just like to see a fair playing field in today’s market. The oil company
has pretty much advised looking at other venues to make money; not to expect to make a profit in
gasoline sales.
The AG's office has far more constructive things to do than chase rainbows. Maricopa county
needs to be put on the same fuel as the rest of the state. Until this happens, the refineries will
continue to charge expensive prices for fuel in Phoenix.

I've only been in this business for two years. Because of that I've asked many questions of those
who I have been in direct contact within the industry. Most of my concerns have been about
pricing at the distribution level. Unfortunately most of my questions are not answered. They are
stonewalled or they have been answered in a less than acceptable manner. I almost feel this
industry is a very guarded and secretive industry – kind of a “Good Ol’ Boy” club. Many of us
small service stations in this area are charging a little more right now to make up for the fall and
winter months, where we were making very little margin, due to the high prices we were being
charged in these months. I’ve many concerns with the industry, far too many to put on paper. If
there is going to be any committee or investigation, I would be more than happy to be involved. I
was in the rental car industry for 20+ years prior to this, and I thought that industry was less than
forthcoming to the public, but after two years in this industry, I’m even more concerned.
We have been losing money on gas for at least eight months at times as much as 15 cents per
gallon. Our average profit before 9-11 was approximately eight cents per gallon.

My companies need a thorough evaluation of the wholesale price. They are making more money
(but say they aren't) as the dealers make less because of low volumes. The major oil companies
sell gas to other competition cheaper than they do us. It’s unfair to us and the consumer, basically
squeezing us out of our business!!!
This state is anti-business - won't allow signs New Mexico. Taxes are higher than New Mexico. I
can't pull cheaper gas from El Paso. I'm forced to pay 20-25 cents more from Tucson. ITS NOT
Why bother me now? I have presented to your ineffective office proof that I have been
overcharged by up to 40 cents per gallon for the last four years - Don't try to kiss up now. Texaco
has done all they can to put me out of business!!
This pricing strategy [referring to Q5] has not allowed me to make any reasonable return on my
investment in this station and franchise yet.
I have had a great deal of pressure on my gasoline pricing decisions lately. As I have informed
my attorney, Texaco has recently engaged very regularly in providing gas to my competitors

Social Research Laboratory, Northern Arizona University                                                 36
Arizona Attorney General Gas Retailer Survey

below my cost. I am attaching copies of receipts of my costs and my competitors’ costs or prices
since early April. You will see that Texaco has been providing my competitors with low priced
gas; that station lowers their price, and when I order within a day or so, I am charged a price
higher than theirs. Surprisingly, the price I am quoted after my order is filled goes down to the
price charged to my competitors. These tactics cause my costs and my prices to be forced to be
higher than those charged by company owned stores.
Also, in violation of my franchise contract, Texaco has decided to remove its branded credit card
from the market. Their credit service was very cost effective and helped me to keep my costs low
and to provide both debit and credit card service to customers. Now, alternate arrangements have
to be made and the costs of handling these plastic transactions have caused my costs to rise.
Please contact Mr. Meyer for details about my lawsuit against Texaco, including my complaint
that they misled me by representing that I should expect to sell a great deal more gas at this
location than has ever happened. This misrepresentation has also caused me to have to charge
more for my gas than if I were able to sell at the volumes they had promised me.
I know that some other independent branded station owners have been treated the same way, and
we all feel that the excuse of the merger of Texaco and Shell is being used to put the small,
independent businesses out of the market. This is wrong, and I hope your office will work hard to
make these giant companies do business fairly with us, or pay us back for the investment they are
causing us to lose. Please call me at any time if I can help you with your investigation.
We try to compete against gas company owned and other stations with subsidies - at times, "zone
pricing" and other "dealer tank wagon" price schemes seem like "predatory pricing". Often our
delivered cost is in excess of others street prices.
Our gas is supplied from a New Mexico distributor.
Sometimes cost goes up so much it is very hard to understand - how can our cost be 15 to 25 cents
higher than most of the other branded gas stations? If asked, my supplier ... will say it's a shortage
of gas or problem in pipe line, etc.
Sometimes it gets very tough to find any gas suppliers. Two months ago I could not get any gas,
and if I did find it, I paid $2.09 per gallon for Regular and I was selling that time at $1.99 just to
stay in business.
I've had a five cent margin for two years running. Last year we only made $12000 selling
gasoline - doesn't pay the light bill. These last two months of good margin are catch-up.

I believe the entire state needs to sell one type of gas. If the large metro areas need a cleaner fuel
then make the whole state sell this fuel. We are at the edge of Maricopa county in Gila Bend and
have to sell the same fuels as downtown Phoenix. Yet, my competition just down the freeway is
not in Maricopa county and buys the clear gas (branded and unbranded) for then to fifteen cents a
gallon less always. I do not believe this is fair to the low income population of Gila Bend. The
duplication of storage facilities in Phoenix having to store two types of gas contributes
tremendously to [?] problems. We would have twice the storage capacity in Phoenix if there was
only one type of gas being sold in the state. The phoenix and Tucson terminals have to split their
gas storage between two types. The constant switching is bad economics and keeps inventory
levels low. One type of gas for the state would double our storage and keep supply more readily
available. I believe the whole state should sell the cleaner fuels (RFG). Get rid of the clear gas.
Major oil companies should not be able to market gas at retail level. If a wholesale Jobber is in
place trying to supply its Jobber accounts, major oil should either market at wholesale or the retail
- not both. In my opinion, this is very dangerous to the public. A major oil company can break its
wholesale Jobber by an unfair price which at times can be as much as three to five cents higher
than they themselves are charging on the street. They will get all volumes, and then when the
Jobber/ Sub Jobber are gone, they can price what they want. Exxon lost a $44 billion dollar
lawsuit to its Jobber-Sub Jobber in the mid west over this practice.
I think the large fuel distributors are making all the profit. Small gas station owners must struggle
to survive.
We contract operate this store for shell and have no control over gas cost or retails.
We contract operate this store for shell and have no control over gas cost or retails.

Social Research Laboratory, Northern Arizona University                                                  37
Arizona Attorney General Gas Retailer Survey

We contract operate the station for shell. We have no input on cost or retails of fuel.
We contract operate the station for shell. We have no input on cost or retails of fuel.
We contract operate the station for shell. We have no input on cost or retails of fuel.
The prices above include all taxes. Price to supplier does not include freight paid to separate
company hauling fuel. Freight on gas is .049 per gallon; freight on diesel is .056 per gallon.
The prices have gone up without reason. They always have excuses and its their way or the
highway; they got us. The oil company does whatever they want when they want and nobody can
stop them.
It seems to me that every year the oil companies come up with the same excuses year after year
for raising prices prior to higher demand weekends or periods, i.e. fires at factories. We never run
out of gas, so did the price really need to go up?
Shell is putting pressure on converting to a new image. If we don't, they want us to unbrand now.
98% of gas is sold through our marina fuel dock for watercraft/vessels, not land vehicles.
We are required by National Park Service Contract to provide fuel and service station amenities.
We are also required to pay contract concession fees of 7.25% of gross sales. Therefore you will
conclude this is not a profit center.
Operated per requirements of concession contract for operating facilities at Grand Canyon Lodge -
North Rim. Operational Approximately 5/10 - 10/15 each year for public sales. Price is based on
cost plus NPS regulated markup percent.
Arizona put this nine cents (no eight cents) tax on pump diesel. It is killing me. I have told people,
but no response. New Mexico is building new tank stops on the state line, which is hurting all of
I don't agree with the speed of price increases at wartime (approx. 5 cents every other day)
compared to the slow decrease since the price of oil went down, now one to two cents per week.
It would be nice to make as much of a gross profit on an average as we pay in state or federal
taxes per gallon.
Zone pricing by majors have sometimes been 15-20 cents higher than Tuscon market, which is 80
miles away.
Many factors determine pricing of petro products. The largest factor is the law of supply and
demand. I do believe but have no proof that the major fuel supplies were "gouging" Arizonians.
I appreciate the interest in our industry. However, it is not the retail side of the business that
should be investigated. Its the supply side.
Before the Memorial day holiday my fuel was $1.579, $1.679, $1.779 - it seem like suppliers
always raise the price to dealers for busy times.
Goddard is on a lawsuit fishing expedition. Over 200 stations went out of business in 12 months.
Competition is brutal. Goddard needs to enforce immigration laws and lay off his Big Oil
Grandstanding. Get the illegal aliens out of Arizona.
We pay a surcharge for our gas this year over last year, anywhere from $5.40 to $60.50 on top of
our cost, so we have to add that in to our cost of gas.
Remember that the state charges 18 cents - 26 cents per gallon and major oil companies have gone
to zone pricing.
Due to independents (Safeway, Wal-Mart, Quick Tripp, Costco) our business is dwindling.
I think gas pricing - wholesale - retail should be market based - There is plenty of competition, but
company stores pushing the dealer pricing is a problem.
Credit card fee of 4-5 cents per gallon processed by the oil company and I have no option to go
anywhere else which puts me in the negative 3 ½ cents per gallon on every gallon regular sold.
You should reduce all the taxes on gas and pass it to customers, I think!
Recently, Chevron's wholesale price to me has been approximately 7 cents higher than the other
major oil companies. Most other brands are selling for less than my wholesale price from
There is a very large gap between unbranded and branded gasoline on a wholesale basis. Branded
stations cannot compete in this market with unbranded or licensed facilities.
The last two years have been very difficult for margins due to oil companies basing our rack costs
off of our retail controlling our profitability. This has changed since Jan 2003. We are just now
being allowed to have a profit margin. The price difference between branded fuels and unbranded

Social Research Laboratory, Northern Arizona University                                                  38
Arizona Attorney General Gas Retailer Survey

fuels has been 20 cents per gallon, which has made it very difficult to compete.
Shouldn't you be investigating predatory pricing by hypermarketers, or competitive allowances by
Major Companies that don't treat all customers equally by pricing policies?
(concerning Q9) Don't have figures readily available (in storage). Please call if you need them
No Retail
(Q7: N/A We sell 100 LL Av Gas). We are a general aviation airport, selling aviation gasoline.
We are not an automotive gas station.
Sunsites Transportation Inc. is a public transportation provider. We are a non profit corp. and the
Buzz Stop is a Dept. and feeds back into the transportation. This is a 5311 Grant program.
It is a cardlock commercial Fueling Site
This is a trucking co & most product purchased is for Dewitt trucks.
(concerning Q9) Landside 2.10 & Waterside 2.27
I feel the most significant problem with price fluctuation in Maricopa County is due to the
reformulated fuel regulations - if AZ would come up with a fuel that was used throughout the state
- year round - and was producible by CA Refineries – shortages would be eliminated – and price
fluctuation would e minimal. Service station owners probably make a profit percentage on the
gasoline they sell in the range of 5% - far below any other industry. Their prices at the [illegible]
reflect exactly what happens in the supply [illegible].
(Only Premium is sold outside of the company) Why do we have any road tax on fuel that is used
on boats? I can be reached at 602-625-8201. Can this be deferred[?] or refunded?
The 14 years that I have been associated with Sandpoint our retail price has always been the
lowest on the lake. As of today premium is selling for: sandpoint $2.099, Havasu Springs Resort
$2.359, Islander $2.499, and Black Meadow Landing $2.499.
(Q3: Maverick purchases gasoline and Diesel for sale in AZ from suppliers in...] [Q7: responses
are an average of all stores - gasoline amount is for Reg, Mid, and Prem.)] Maverick has over 10
stores in AZ, several of which use different suppliers.
Our company does not own the stations nor the gasline inventory. We sell it and receive one cent
per gallon from Jaco Oil. Normally, they price it equal to the lowest price in the area.
We need more consistency from suppliers for pricing, so we can pass it on to our customers.
I believe that under the Fed Pet. Act they should sell cheaper on Rack. Everybody should be able
to sell to me. Under Fed Pet Act, we can sell for whatever we want. I have tried to talk to the
Attorney General Office years ago. But nobody listens. You need to study Fed Pet Act! Gas
business is a monopoly right now. All of it is owned by distribution companies in the Metro Area
and pay to jobbers in Suburban areas. I have talked to David Kleinz. He has listened to me!
Thank God. I believe there are a lot of antitrust violations. Failure of Disc and Discrimination
against any and all small businesses. But we can’t fight big companies. Big companies conspired
years ago to close all small stations by using their image premium [illegible]. …they sell set same
price on the street.
Today's margins are higher to survive - road taxes are up, environmental costs continue to rise
with on going legislative action (by the way, it is never in our favor) property taxes, wages. Our
industry is one of the few that has to post prices. At the same time – customers can go where they
want! Don’t they? Please call if you genuinely want to hear the truth.
Insurance, testing, adequate fees, department of weights and measures fees, electricity to pump,
wages to operate, repairs, filter maintenance, lighting, signage - all go into cost of gas. Don't be
shortsighted looking at margins against wholesale only. The culprits are the big oil company
types who run the refineries. True supply/demand economics would indicate that there is no
reason to have a 10 cent wholesale increase simply because the California pipeline is temporarily
shut down for routine maintenance. Tackle those folks, and you’ll have your answer.
I will not share the specifics of my price structure. ...if I can maintain a 14-16 cent per gallon
average for a year, I feel like we had a good year. That margin, coupled with good store sales in
the convenience store, will show me a net profit of about 15% on my investment. I submit that is
not a good return on a business, but it is about all I can really expect given the competition and
corresponding volume constraints.
We are not a retailer station - we are owned by a school district for district vehicles only. 6/9/03

Social Research Laboratory, Northern Arizona University                                                 39
Arizona Attorney General Gas Retailer Survey

We are not a Retail Gasoline Supplier. We are a whole sale supplier, selling to Rancher, cities,
county governments, mines, etc.
I have provided information relative to that which I have access. All other information requested
should be referred to 7-Eleven, inc. in Dallas.
We receive a small percentage of the profit to do price changes and ordered collect revenues and
such; 25% of profit or 1.5 cents per gallon which ever is higher.
7-Eleven does not share gas costs.
I don't control anything having to do with gas. 7-Eleven corp in Dallas makes all decisions.
To reduce gas prices, change the law that if a charge card is used outside without a signature and
the card owner complains, the gas station owner has to absorb the loss. Arg $300.00 MT.
We need help for small businesses because we are going out of business, as big companies are
trying to push us out.
Sir, may I make an appointment to discuss the situation I'm in at this location? Thanking you in
advance for your concern, 928-779-1514. Authur Cavalier.
In recent months with high cost and loss sell, it is very hard to pay all expenses. Sometimes it
seems very hard to understand the gas price with lots of up-and-down with price.
(Q8: Note, my cost was higher then my selling price). The inversion of gas prices, my cost being
higher than I could market it for, has been happening frequently in the last three years and has cost
our gross profit approximately $100000.
To Whom Concerned. I was very reluctant in completing this survey because about one year ago
I contacted the Attorney General’s Office about price discrimination. At times the difference
between my cost and my lowest competitors cost was as much as forty cents per gallon. The
Attorney General’s office response was “sorry about that”!
I would like to know why in the state of Arizona, we have to buy gasoline at a higher rate than a
lot of the rest of the country.
The sale of gasoline for us is just a little over 10 gallons. We need 16-18 cents per gallon margin
to cover our costs. When the competition from the major oil companies will allow it, we have to
get a bigger margin to make up for the times that we don't have any margin.

Phillips charges whatever they want to the dealer. Their company store on [?] and McDowell,
they sell for 1.539 but they charge me 1.542 - very bad people to deal with. I wish everybody
paid and sold at the same price.
I would like your office to inform the confused consumer that the owners at gas stations only
make a few cents per gallon of gas sold & have to pay credit card charges of up to 3.8% for the
customers' cards used at the station. We also have to pay electric to run the pumps and insurance
bills – therefore we make no money on gas at ALL! Europe is and has been four to five dollars
per gallon for gas and no one over there is complaining!!!
You need to stop the oil companies from closing all of the small independent stations and leaving
them out of business. They then will completely control the market and the public will pay a
hefty price. need to ... stop zone pricing.
Last year is unknown to me, I have been manager for three months only.

Quite often my own supplier will sell gas through their company owned facilities that surround
my location for the same price or even less than they will sell it to me. This makes it hard to
explain to my customers why my price is higher. It's no different than if General Motors opened
up a store across the street from their dealer Brown & Brown and sold cars to the public for the
same price as they charge Brown & Brown.
Please be advised that oil companies manipulate pricing by setting "zone pricing" at different
areas and setting higher prices to independent dealer compared to company operated sites.
...sometimes our company sells from the company stores below our cost. Also, they deliver fuel
to Phillips stores using 76 tanker trucks which causes problems with our customers because they
sell gas cheaper than we can buy it.

Social Research Laboratory, Northern Arizona University                                                 40
Arizona Attorney General Gas Retailer Survey

Oil companies are controlling both the resale and wholesale gas prices both through their
companies and company operated gas stations. We wouldn't be at the money of oil companies
today if Brenda Binns had listened to us five years ago and supported the divorcement act.
The last two months is the first time in two years the hypermarketers have allowed branded
retailers the luxury of making any money at all.
Due to Oil Companies adjusting costs based on retail environment, we have had very low margins
for the last two years, until recently. Since February 2003 our margins have improved. The price
differences between branded and unbranded gas has been as much as 20 cents per gallon cheaper
for [illegible].
We need about 10 cent markup service. I know other states adopted a law that hypermarket and
company operated stores cannot sell below independent operated stores’ buying price. I hope, to
protect the independent market and the public, that the state considers adopting such a law.
The state should set minimum and maximum for what stations should price. Major companies'
stations are selling at times way below our cost to drive us out of business.
We believe that the unique specifications for gasoline in Maricopa County contributed
significantly to the supply shortage Costco experienced in March. Costco would like to see
Maricopa County adopt gasoline formulas consistent with adjacent markets so that alternative
supply sources would be available to dampen price fluctuations and reduce supply disruptions.
Below cost retailers and hypermarkets such as Quick Trip, Costco, Walmart, and grocery stores
are driving independent retailers out of business. Major suppliers are also leaving the state and
are not renewing existing contracts or branding any new businesses. The short term result may be
lower prices, but the long term AZ will be paying much higher prices. If you think prices are high
now – wait. You have not seen high prices yet. Even supply will be controlled by only a few
     1. Exxon Mobil Merger; Exxon stores sold to Tosco who sold to Conoco Phillips. Mobil
          dealers are forced to close by supplier.
     2. Chevron/Texaco/Shell; dealers forced out of business. Texaco Shell will not renew
          current contracts. Chevron’s selling all corporations stores and not branding any new
          accounts while saving pricing to existing accounts.
     3. BP/Arco is closing many Arco Stores.
     4. Conoco Phillips – selling all Circle K stores and all Exxon stores and 76 stores. Who
          will supply?
Result will be competitors, convenience (fewer stores) and available supply will leave the state.
Result will be much higher prices through fewer available outlets.
[Q9 responses are based on average of all company operated stores].

Social Research Laboratory, Northern Arizona University                                              41

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