FLOG

Gas Bag

So some law professor in Illinois has recently been "traveling along the beautiful Oregon coast," and in the process has gained a full and authoritative understanding of the economics of gasoline retail in our fair state.

His post on the topic makes three points:

1. A law requiring gas stations to pay employees to pump gas acts as a barrier to entry for large retailers such as Walmart, protecting the market for, um, gas stations.

I can only presume Ribstein jumped to this particular conclusion because he saw no Walmarts selling gas on the Oregon coast. The law preventing consumers from pumping their own gas has certainly not restrained Costco, Albertson's and Fred Meyer from venturing into the gasoline business in Oregon. I'm honestly at a loss for how a law that effectively mandates a larger payroll would serve to benefit small franchise gas station owners at the expense of large supermarkets where an additional employee or two would add only a marginal burden.

2. The law causes consumers to have fewer places to buy gasoline.

I've driven all around this fair country of ours, and have yet to discern any difference in the number of gas stations in Oregon and in other states. There always seems to be just the right number, except when you really need one, and then there aren't any. The only exception is in very rural areas where federal penalties for tank leakage have put many small operators out of business. This has nothing to do with Oregon's pumping law.

In addition, the past ten years have seen a number of gasoline companies establish a presence and expand in Oregon -- Leathers and Tesoro, for instance, had no presence here a few years ago. A little more in the past, BP carved out its niche in Oregon concurrently with the broader British invasion. Small or even single-station operators abound in rural parts of the state. This is all anecdotal, I know, but would any of it exist if the pumping law presented a genuine barrier to entry?

3. Oregon consumers "surely" pay higher prices for gasoline.

The word "surely" here indicates the author's lack of inquiry into the point.

I have never been able to discern a difference in price between Oregon as a whole and surrounding states as a whole. I do often see marked differences, within states, along the following lines:

-between well-connected urban areas and isolated rural areas

-between stations on major routes of commerce and supply and stations off the beaten path

-between stations in areas with concentrated competition and stations with little local competition

If our friend noticed higher prices on the Oregon coast, I'd chalk it up to one of these factors before blaming the minimum wage flunky who put up with his attitude. I infallibly find prices higher on the coast than they are inland. I also find higher prices in Yachats than in Florence. I chalk these price disparities up to higher costs of distribution and lessened competition. They certainly aren't paying the station attendants any more out there.

I have yet to find an authoritative source comparing prices in Oregon to other western states, but the mean WA and CA prices I've found -- $2.87 for WA and $2.94 for CA -- present no difference from the $2.93/gallon I paid for a tank (of Plus) today in Eugene, OR. The notion that some small number of minimum wage employees could sufficiently affect a gas station's daily operating budget as to require a significant price adjustment strikes me as a smelly canard. Even self-service stations have at least one person on duty at all times; many Oregon stations have no more than that -- it's just that the employee has more to do than sit around collecting money.

And our professor closes with this:

Anyway, I would appreciate it if someone would get this law repealed in the next day or so before I have to buy gas in Oregon again.

Okay, we'll get right on that, visiting jack ass.

Posted by FLOG at October 7, 2005 11:35 PM