Gasoline distributors in the Burlington, St. Albans and Waterbury areas have tripled their profit margins over the first six months of the year, according to U.S. Sen. Bernard Sanders of Vermont.
Sanders, who has called for a federal investigation into Burlington-area gasoline prices, released data Friday showing Burlington was the fifth most profitable market for gasoline distributors in the U.S. and the most profitable market in the Northeast at the end of June.
The margin between what distributors pay for gasoline and the retail price in the greater Burlington area more than tripled from 16.3 cents a gallon during the first week in January to 57.9 cents a gallon at the end of June — more than double the national average profit of 27.1 cents a gallon, said Sanders, citing data compiled by the independent Oil Price Information Service.
“We are in the midst of a terrible recession, and a lot of working families who drive to and from work are hurting,” Sanders said in a statement. “Service station owners have a right to make a profit. They don’t have a right to rip people off.”
The margin is the difference between the rack price, or what the distributor pays, and the average retail price, less federal, state and local taxes, plus 1.5 cents per gallon in transportation costs.
Joseph Choquette, a spokesman for the American Petroleum Institute in Vermont, said Sanders’ assertion on profitability is misleading.
“In the first three months of the year … margins were extremely tight, and so you’ll have periods when margins are tight and periods when they’re not so tight,” Choquette said Friday. “So if you focus on one end of it, you don’t get the whole picture.”
Choquette also said what Sanders calls a profit margin does not reflect actual profit. He said it does not include expenses the distributor or gas station operator incurs, such as credit card fees, distribution costs, labor and the cost of operating the station.
Although the Oil Price Information Service data show the margin between the rack price and average net retail price (less federal, state and local taxes, plus transportation) dropped to 39.3 cents a gallon for the week that ended Monday, Burlington remained atop the list of “Top 10 Best Earning Metro Markets.”
The Burlington rack price at the terminal for that week was $2.732 a gallon, with an average retail price (including taxes) of $3.595 a gallon — the highest retail price among the top-earning OPIS metro markets.
According to OPIS figures released by Sanders’ office, Burlington-area margins in January were 5 cents a gallon higher than the national average and remained somewhat higher than the national average until April, when margins quickly began to widen.
Distributors in the St. Albans and Waterbury areas saw similar increases in their margins.
Last week, Sanders released data from a Federal Trade Commission analysis that found June gasoline prices in Burlington were between 10 cents and 43 cents higher than the FTC had estimated.
At the end of June, the average price for regular gas in the Burlington area was $3.68 a gallon, 10 cents more than the FTC projected high price of $3.58 a gallon and 43 cents more than the estimated low price.
Sanders this month asked the U.S. Department of Justice and FTC to investigate gasoline prices in the Burlington area.
According to AAA, the average price in Vermont on Friday was $3.52 a gallon. In the Burlington area, the average price was $3.58 a gallon.
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