Wausau-area motorists haven’t been imagining things when they have suggested that gasoline prices here are higher than just about anywhere else in central Wisconsin or the rest of the state.
A Wausau Daily Herald analysis of gas figures compiled by the AAA reveals that prices in Wausau routinely are a few cents higher than the state average. They also are pennies per gallon higher than average prices in surrounding central Wisconsin cities and other major metro areas in Wisconsin.
Trying to figure out why that is as more than 695,000 people hit Wisconsin’s highways this Memorial Day weekend and the summer travel season kicks off is not as easy as it sounds.
Station owners say their prices are subject to outside influences, particularly the prices competitors put up on their street signs.
Fluctuations in market prices for crude oil, varied delivery dates and storage space all can affect the frequency and size of price changes, according to several local owners interviewed this week.
“Maybe 80 percent of people believe me when I explain how little control I have over prices,” said Raj Bhandari, who owns three gas stations in Merrill.
Drivers who travel around central Wisconsin for work or pleasure don’t necessarily buy it. And they said a few pennies per gallon might not seem like much, but it quickly adds up for motorists struggling to stretch their budgets.
A complex formula
According to AAA’s Fuel Price Finder, the average price for a gallon of regular gas in Wausau Friday afternoon was $3.949, well over the $3.786 average in Stevens Point and the $3.877 average in Merrill. Wisconsin’s state average for a regular tank was $3.843.
Retailers in the area said swings in providers’ gas prices can affect individual stations differently based on the dates on which fuel is delivered to stations. As gas prices set by the major terminals fluctuate with refinery or pumping station rates, retailers have to determine the best street price for gasoline, Bhandari said.
In smaller communities, station owners sell less gasoline in a year than their counterparts in major cities, he said. The quantity of gasoline sold can allow retailers in large cities to charge lower street prices and stay afloat, he said.
Bhandari said he often doesn’t have that option. Setting prices is a business decision, balancing his own operational costs with competitors’ prices.
“I can’t undersell gas,” he said. “I don’t make enough in the store alone to (survive).”
Jim Kemerling, president and CEO of Riiser Energy, said those who believe that station owners make more profit when prices are higher are off base. Profit margins usually are the same — or lower — when owners increase prices at the pump, largely because of credit card fees, he said.
Consumers tend to use credit cards more often when gas prices increase, costing stations owners about 9 cents per gallon in credit card fees when retail prices are $4 a gallon, Kemerling said.
High gas prices also cut down on customers’ willingness to spend money inside convenience stores on coffee, snacks or other merchandise that adds to owners’ bottom lines.
“Yes, we control our street price,” Kemerling said. “But we have to pay for the gas first, and those prices change every day. The retailer (is) at the end of the water hose, at everybody’s mercy.”
Getting it here

Crude oil travels from sources overseas and across American borders to refineries, where it is processed into gasoline. Pipeline owners charge refineries to ship their product to terminals, where drivers for individual retailers, wholesalers and large oil companies fill up large tanker trucks and deliver to individual stations.
Every step has expected and unforeseen costs that can affect local retailers and consumers at the end of the supply chain, Kemerling said.
“You have labor costs, you have transportation costs,” he said. “It’s like any other product that moves.”
But there’s another factor at issue for local owners who set their own street prices for gasoline: competitors’ prices that are clearly visible on giant signs across the street or further up the road.
“Name another product where that happens,” Kemerling said. “What does Trig’s charge for milk? Pick ‘n Save? County Market? You won’t know unless you go into the stores and compare.”
Kemerling said that’s his best explanation for Stevens Point gas stations that typically undercut those in Wausau. A gas station in Stevens Point owned by Renew Energy, under the umbrella of an ethanol company, routinely sets lower prices, creating a “domino effect,” Kemerling said.
“A couple competitors down the block think they have to match them on price, and everyone follows,” he said.
Bhandari said he frequently checks other stations’ prices. It’s a smart business move, one that any retailer should make, he said.
“If I change prices at one station, it travels,” he said.
Baffling formula
Drivers filling up their tanks Friday afternoon in Wausau weren’t buying any of the station owners’ arguments. Chris Linden, for one, has given up on trying to understand how gas prices are set.
Linden, of St. Paul, Minn., pulled his minivan into the BP station on Rib Mountain Drive off of Highway 51, paying $3.99 per gallon to fill up on the way to his family’s Door County summer home.
“We just made a comment that it was more expensive here than at home, where it’s about $3.69 for regular,” Linden said. “If you find out how they decide, let me know, OK?”
Heidi Moss, a Milwaukee resident traveling with her husband and children to their Lake Holcombe summer house, said she wasn’t fazed by Wausau’s gas prices. Milwaukee-area gas stations were charging about the same Friday when the family left the city in their conversion van and SUV, Moss said.
“Everyone’s got to drive,” she said, shrugging. “What can you do but pay what they ask?”
One thing consumers can do is file complaints with the state if they believe owners are violating Wisconsin law that dictates gasoline prices or colluding to set prices. But the Wisconsin Attorney General’s office could find no record of a consumer complaint filed against gas retailers in the Wausau area.
Brock Bergey, a spokesman for the state’s Department of Agriculture, Trade and Consumer Protection, said his agency likewise hasn’t received complaints about local gas prices.
Both agencies handle complaints of price gouging under state law, passed in the aftermath of Hurricane Katrina when gasoline prices spiked in New Orleans and surrounding areas. But a claim only can be made after Wisconsin’s governor has declared a state of emergency in the case of a natural disaster or another event.
“Definitely, as gas prices go up, consumers are on heightened alert,” Bergey said. “But there’s nothing from Wausau to trigger or indicate anything not in compliance.”
Not that bad?
Pam Moen, spokeswoman for AAA Wisconsin, said she doesn’t see the difference between Wausau’s average station prices and averages in other cities as overly significant.
“When we see discrepancies, it often has to do with regional supply, distribution and timing,” Moen said.
A larger difference between cities also can mean direct local competition is influencing prices in one location. If even one station undercuts competitors by several cents, other owners in the area might feel forced to cut their prices, she said.
“Especially as gas prices have reached a new record this month, a couple cents can make a lot of difference to people,” Moen said. “If I’m driving down the street and three stations have different prices, I’m certainly going to drive to the one with the lowest price.”
It definitely makes a lot of difference to Gary Gray, a rural Hatley resident who travels for his job as a salesman.
He’s fed up with higher gas prices at Wausau stations and can’t understand why stations in Stevens Point or Wittenberg charge up to 20 cents less than Wausau, leaving him highly suspicious that station owners set prices with just one thing in mind: profit.
“I think they’re all in cahoots,” Gray said. “They set the prices and there’s not a damn thing we can do about it. It’s terrible.”