No One Likes High Gas Prices: The complexities of setting the price at the pump.

• Author: Rhode, Scott

At the corner of Northern Lights Boulevard and Minnesota Drive in Anchorage, three gas stations face each other: Carrs Safeway, Chevron, and Vitus. From one spot, a consumer can read the price of each station's key product on their illuminated signs. Fuel is one of the few goods whose price is advertised so publicly, to the tenth of a cent.

"It can be the same price for a week, and then sometimes it might change three times in one day," says Vitus Energy co-founder and CEO Mark Smith.

If the price goes up three times in a day, customers get angry. So why provoke them? "You just want to have transparency. It is the price that it is, and you need to communicate that and let them make their own decision," Smith says. "I guess if they're very argry, they'll drive somewhere else."

At Northern Lights and Minnesota, drivers don't have to go far, and that corner is hardly the only intersection where competitors are next door. Proximity is a function of traffic flow, according to Smith. "If you're going the wrong way, you're probably not going to go to the opposite side of the road. You're going to take the station on your side or wait until you're coming back the other direction," he says.

Indeed, some drivers choose a gas station based entirely on location and ignore price entirely "It's a strange business. Some customers will drive across town for a better price than other people. [Or] if you're on the correct side of the street for them on the way they happen to be going, you're going to get the business truly as a convenience," Smith says. "You see both types of customers."

Vitus Energy has been distributing wholesale fuel since 2011, and the company purchased its first retail station in Dillingham in 2013. Vitus has since acquired stores in Sterling, Trapper Creek, Tok, Healy, and a couple in the Anchorage Bowl.

Wholesale distribution is largely the same, whether by Vitus, Crowley. Inlet Energy, Sourdough Fuel, or Shoreside Petroleum, so each company distinguishes its brand through service.

In the case of Shoreside, "We're a family-run company, you know," says Patrick Mulligan, director of supply chain management. "It's a smaller management team, and we like to think we're a little bit closer to the end user and the consumers."

Shoreside Petroleum is one arm of Petro 49, which started in 1936 as Andy's Oil Delivery in Seward. Delivery driver Dale Lindsey bought the company in 1959. His son Kurt got into the business in 1981, purchasing Marathon Fuel Service in Seward and turning it into Shoreside Petroleum, which became a subsidiary of Petro 49 alongside Petro Marine Services.

"We're transportation, but we're also procurement and purchasing," Mulligan says, "Part of my job is working with the refiners and with the upstream folks to make those purchases, and then we distribute it through our network and ultimately to the end user,"

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