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Petaluma gas prices high compared to Santa Rosa


Do Petalumans pay higher gas prices than people in Santa Rosa?

It certainly looks that way.

If you were scanning gas prices on websites such as GasPriceWatch.com Tuesday, you could see the fairly logical cascade of prices along the Highway 101 corridor from San Rafael to Santa Rosa.

San Rafael averaged $3.99. Novato averaged $3.98. Petaluma came in at an average of $3.97. Rohnert Park averaged $3.89, and Santa Rosa averaged $3.84, or 13 cents less than Petaluma's average.

The farther you get from the bay, it seems, the lower the price.

If you spend some time monitoring websites such as GasBuddy.com or GasPriceWatch.com, you'll see a trend appear – Petaluma's daily gas prices, on average, are generally reported to be at least 10 cents higher than those in Santa Rosa.

In a larger context, both sets of prices are up 5 cents from last week due in part to the "summer bump" — a required switchover to an ethanol-blend gasoline. Refineries change to summer-blend production in March and April, and gas stations have until June 1 to start selling the summer-grade gas.

According to AAA, prices are following their typical yearly trend by moving up during the spring, peaking during the summer and decreasing through the fall.

When asked why Petaluma would price so much higher than Santa Rosa, Cynthia Harris, AAA Northern California spokesperson, speculated that location, distribution or the higher population and number of gas stations may have something to do with it.

"There's really no reason why Petaluma would be targeted with higher gas prices," Harris said.

At a local level, some speculation has been made as to why the cities of Petaluma and Santa Rosa price so differently.

One theory comes from Arash Salkhi, owner of 11 gas stations in the Bay Area and three in Petaluma. Salkhi said Santa Rosa's lower prices are partly a chain reaction to Safeway's new station there.

"You've got companies (in Santa Rosa) like Safeway selling below cost at $3.61, when I'm across the street at $3.99," Salkhi said. "If I bring my margin down to compete, the guy next to me is going to do the same thing."

In Petaluma, Safeway's proposal to build a fueling station near its South McDowell Boulevard store is continuing through the planning process after a moratorium failed that would have halted the project. Some councilmembers and residents expressed concerns that Safeway utilizes below market "predatory pricing" to drive other gas stations out of business.

Salkhi said Safeway's gas prices in cities where they've been established for some time — such as Novato, San Ramon and Pleasanton — are 20 cents higher than Santa Rosa because the company is trying to "shock the market." By this he means Safeway draws customers' attention with abnormally low prices and then slowly raise prices once a customer base is generated.

Dan Lutz, owner of the the Chevron station on East Washington, said another factor in pricing is that some smaller brands with a larger presence in Santa Rosa, such as AM/PM and ARCO, don't take credit cards — a tactic Lutz said can translate into big savings.

"We don't have an ARCO in Petaluma," Lutz said. "I think that would drive prices down."

Lutz thinks an ARCO in Petaluma could drive his cost down, too. If an ARCO were to pop up across the street from a Petaluma station owned directly by Chevron — of which there are two in town — he said Chevron would "definitely adjust their cost to try to compete."

But despite what drives the difference, one thing commuters at the pump can count on in the spring and summer is higher prices across the board.

Harris said this is due not only to the summer bump, but also a mild winter that encouraged travel. Harris added that crude oil has risen in price over the last several weeks due to geopolitical tension in Ukraine and Venezuela.

"We're kind of in a wait and see mode," she said.

(Contact Allison Jarrell at allison.jarrell@arguscourier.com)