Friday, May 24, 2013

By Nelson Sigelman
Published: July 9, 2009

Seven months ago Massachusetts gas prices reached their lowest point in four years. In the first week of December the price of a gallon of regular gasoline dropped below $2.50 at many Island gas stations, with the lowest reported price $2.24 per gallon.

Prices are high compared to those at stations on Cape Cod, but prices are often similar among retailers here. Photo by Susan Safford

By Island standards, December was certainly a bargain, but off-Island motorists were finding even lower prices that holiday season. An AAA survey during the same time period found a low price of $1.55 per gallon and a high of $1.99 per gallon.

As of Monday, the national average retail price for one gallon of self-serve regular stood at $2.6113, or about 3 cents cheaper than one week ago, according to AAA. "Compared to last year, when prices were reaching their record highs almost exactly at this time of the year," AAA reported, "retail gasoline is about $1.50 cheaper."

The difference between the prices of gas on the Island compared with the mainland has been a topic of interest -and suspicion - for decades among Islanders. And that gap appears to have widened over time.

A survey of gasoline prices published in the Times on November 1, 1990 reported a difference of approximately 26 cents between Island stations and Falmouth stations.

The lowest price difference between the mainland and the Island now appears to be about 70 cents.

For example, on Tuesday the price of a gallon of regular was about $3.36 at the Tisbury Shell Station in Vineyard Haven. It was $2.65 per gallon on the Cape and $2.62 in the Boston area, according to AAA.

Island gas dealers cite several cost factors, most of which relate to living on an island. These include sales volume, limited storage capacity, trucking charges, market forces, a higher cost of living on Martha's Vineyard, and the expense of complying with environmental regulations.

Competitive environment

Another issue raised in a pending lawsuit is the extent, or lack of competition among the Island's nine gas stations spread around the Island -three in Edgartown, two in Oak Bluffs, two in Vineyard Haven, one in West Tisbury, and one in Chilmark.

In January 1997 the Martha's Vineyard Commission (MVC), the Island's powerful regional land use permitting body, approved the Airport Service Station off Barnes road in the Airport Business Park. It was the last gas station to be built on the Vineyard, but not for lack of other would-be entrepreneurs.

In 2002 two companies appeared before the commission with plans to build new gas stations off State Road in Vineyard Haven in an area opposite Cronig's Market. Backers cited competition and the relief it would provide for the Five Corners intersection. The MVC rejected both.

Additional traffic congestion along the State Road business corridor, the effects a new gas station would have on the economic well-being of the Vineyard's two up-Island gas stations, and a variety of personal philosophies that rested on less use of automobiles all played parts in the commissioners' decision making.

In September 2002 the commissioners voted 11-0 to deny a plan for a gas station on the site of the old Coca-Cola bottling plant, then owned by Thomas Gervais and Robert Goldsborough and now occupied by Island Home Furnishings.

In December 2002, the MVC voted 8-3 to reject Tisbury Fuel Service's proposed gas station that included a discount plan for Island residents. The station was to be located on High Point Lane across from the Tisbury Park and Ride lot.

The station backers filed suit in Dukes County Superior Court on Feb. 12, 2003. In its 26-page complaint, Tisbury Fuel Services claimed that the company was denied a fair hearing before an impartial body and that the MVC based its conclusions on "mere speculation," and failed to take into account the benefits for year-round Island residents during most of each year, as opposed to "any detriment caused by a slight increase" in traffic for six weeks during the summer season.

The MVC's enabling legislation provides a legal framework under which the commission is provided with broad discretion when weighing the benefits and detriments of a project. That legislation is a strong legal bulwark.

In March 2006 a Superior Court judge ruled that the MVC acted reasonably when it decided that an offer to sell gasoline at a discount to Islanders did not outweigh the probable detriments associated with a proposal to build a new gas station.