Aghast at oil prices

JANN HENDRY/Acorn Newspapers UPWARDLY MOBILE GAS PRICES—Premium grade fuel at this tation on Calabasas Road has surpassed the $3.49 mark. Only five years ago gas could be bought for as cheap as 99 cents a gallon. Currently, a Mobil gas station in Calabasas is selling it for $3.50 a gallon, the highest in area according to an Acorn survey.

John Rabi, the gas station’s owner, said his situation is unique.

Rabi, who’s sold gas at his station at 24025 Calabasas Road in Calabasas for more than 10 years, said he’s intentionally keeping his gas prices high to make up for the higher wholesale costs he must pay. Rabi said he’s unhappy with Mobil and plans on getting a new provider next month.

“The gas is coming here at 20 cents higher than (gas stations are paying) in the San Fernando Valley,” Rabi said. “They’re charging me 10 cents or 8 cents more than (stations) on Las Virgenes.”

Gas stations pay different prices for their fuel based on location.

This so-called “zone qualification” is determined by the wholesale distributors that provide fuel for each individual station, said David Fogarty, a spokesman for the Western States Petroleum Association.

Rabi said his zone status has changed several times since he’s been connected with Mobil.

“Mobil had me in San Fernando zoning, then they moved me to Westlake zoning, then they moved me to Agoura zoning, then they moved me to Calabasas zoning with Las Virgenes, and then they put me in one zoning in Calabasas—only me,” Rabi said. “They charge me anything they want.”

Mobil representatives declined comment. They referred The Acorn to Fogarty to discuss the zoning system.

“Zone pricing has been a tool that has worked to the benefit of consumers across the country for a number of years in a number of industries,” Fogarty said. “Dealers and companies can respond to the competition in a particular area.”

Gas companies determine the zone for a particular gas station based on the number of competitors in the area, among other criteria, Fogarty said.

“With more stations (in a particular area), there’s obviously more competition and the price levels will be more moderate,” Fogarty said. “If you didn’t have zone pricing, then everything would have to be priced for the entire region. Uniform pricing tends to increase gasoline prices for everyone.”

“On my street corner—I live in Berkeley—there’s two dealers and they compete against each other on price. One guy lowers his prices by 2 cents and then the other guy has to lower his prices a little bit. That’s the kind of pricing pressure or competition that really works to the benefit of consumers at which the zone pricing system is designed to enhance,” said Fogarty.

But Rabi says he can’t afford to be competitive with other gas stations because of the higher cost he’s paying.

Nevertheless, motorists are calling the owners of the Mobil station on Calabasas Road “price gougers” and say the neighborhood gas station is no longer friendly to its neighbors.

Rabi hopes that feeling will change in September when he signs on with his new brand, but he wouldn’t say which.