Fuel Prices OBX By Rob Morris in The Outer Banks Voice

Numerous factors drive up OBX fuel prices, distributor says

By Rob Morris on September 22, 2015

Lynn Keffer of Crossroads Fuel Service spoke Monday.

Higher maintenance, insurance and real estate costs are among the factors contributing to the disparity in gasoline prices between the Outer Banks and neighboring areas, a regional fuel wholesaler says.

Lynn Keffer, president of Crossroads Fuel Service, was the only one to speak Monday after Dare County commissioners had invited local service station owners to explain why gasoline prices are so much higher here.

Keffer said that he has no influence on prices at the pumps, but as an owner of a family business in operation for 50 years, he said he knows what service station owners on the Outer Banks deal with. His Chesapeake company distributes fuel in Virginia and northeastern North Carolina.

Complaints about high fuel prices are long-standing. Earlier this year, Dare County commissioners asked for an investigation by the state Attorney General’s office. An official was assigned to look into the disparity, but the county has yet to receive a report.

This week, prices were running about $2.19 a gallon in the northern Outer Banks compared to less than $2 in Southeastern Virginia and Elizabeth City.

Keffer agreed to step forward after the board sent letters to Outer Banks station owners earlier this month asking why prices here are higher — often 20 to 40 cents per gallon — than in Currituck County, Elizabeth City and southeastern Virginia.

“One of my customers in Dare County showed me his property insurance bill, and his was for wind only, for last year,” Keffer said. “He is paying nearly 30 percent more for one property with one canopy and two buildings than we are paying for a combined 11 properties, five canopies, 13 buildings and an assortment of above-ground storage tanks.

“Ours is property insurance that includes wind, fire, vandalism, even a little bit of pollution . . .”

Wind and salt air take a toll on equipment, such as pumps, he said, and the lifespan is about 50 percent lower than in other areas. Service calls, he said, are more frequent and expensive.

Outer Banks dealers can expect at least one service call a month for repairs to pumps, he said, while a dealer in Elizabeth City might have four to six a year.

“The trip charge for repair to Avon is $459,” he said. “That’s the trip charge for repair. That compares to what we pay in Elizabeth City to about $75 per trip.”

Property values also contribute to higher prices at the pumps. Keffer said that three convenience stores his company owns inland are valued about 50 percent less than a service station for sale on the Outer Banks.

He said he couldn’t cite figures on the difference in mortgage and rental costs, but “whatever it is, it’s more. And it’s going to affect the cost of your gasoline.”

Higher freight costs amounting to about 5 cents a gallon also should be taken into account, he said. Credit cards are used more frequently during the tourist season, so they can add to operating costs as well, he said.

Dealers in Elizabeth City often sell at or below costs, Keffer said, for competitive reasons, to maintain cash flow and to honor contractual commitments to suppliers to sell a specified amount of gas.

Keffer does business directly with four retailers in Dare County — one for 33 years — and with others as a common carrier, he said.

“They’re not out to get anybody,” he said. “They’re just out to make an honest living.”

None of the commissioners asked questions or commented after Keffer’s presentation.