The Cartel

The Cartel

FAIR WARNING:  Barbara gave me THE LOOK about this Post. Said this was not like me, using my writing talents to produce negative, gripey  sounding material. (Nice to find out SOMEONE thought I had writing talent!) Well, I’ve thought about it, over and over, and have decided she’s right. You may, or may not, want to read this post. I just had to leave it here, because I know some people just THRIVE on such stuff. So, if you’re not one of those people who just loves listening to gripey, negative sounding old men, just breeze on by this. I promise, once I get this said and out of my system, I will be back to my old, sweet self, next post.

Webster defines a CARTEL as: A combination of independent commercial or industrial enterprises designed to limit competition or fix prices.

We most commonly hear the word applied to illegal activities, such as a drug cartel, etc. A cartel may also be perfectly legal. But a legal cartel may be every bit as damaging to the general population of a given area as an illegal one.

I have a little story I want to tell. When I finish, you be the judge

My attention was first brought to this situation by an editorial that was written in our paper, maybe twenty or so years ago. The gist was, the editor was attempting to determine why gas just seemed to cost more in Arkadelphia and closely surrounding area than in towns 15-20 miles away, in any direction. The question was asked, and this answer was given. “We are in the middle of a time of great gas shortage. Many of the surrounding dealers are fly by night operations, who are selling gas below cost. Soon, they will be out of gas, out of business. Dealers in Arkadelphia, however, are selling their gas in such a way that they make enough profit to stay in business. We will still have gas to sell when these fly by night operations are long gone.” The editor seemed to think maybe we were lucky, and insured of having a continuing supply of gas.

Well, I sure did want us to continue to have gas to buy. In fact, when I pulled up to the pump, bought a tank full of what little gas this old world had left, I was sure grateful. Almost grateful enough to tip the dealers a few bucks who were managing our dwindling supply in such a wise way that we would never run out. Almost. I never actually got around to doing that. A little bell in the very back of my mind seemed to go off at those times. I just attributed it to the old Devil himself, trying push me toward the negative side of things.

As time went by, I got to noticing, over the years; those fly by night stations, 20-30 miles away, were still there. Still in business. Still cheaper. I think that newspaper editor had a few bells going off in his own head by then,  because his tone, and his questions, changed over the years. And the answers changed. At one point, the answer was something like, “Free competition. We put our prices right out there for everyone to fairly see. We charge more, because we can.”

How come “We Can?” Well, to try to answer that, seems that area is sorta fuzzy. Fuzzy enough that we have to look at the few facts available to us, along with listening to a lot of scuttlebutt. Scuttlebutt may or not be true, we have no proof. Scuttlebutt has it, that a large operation that opened up in Arkadelphia, an operation large enough that it would not be controllable, and traditionally sells cheaper gas than many, had a clause in a contract that did not allow gas sales, by them, for x number of years.

A station operator who sold gas for a time, then discontinued it, was asked the question.” I could not buy gas, and make a reasonable profit, unless I charged those same high prices.”

A later editor of our paper once stated in his column, “People are always writing to me, asking me why I don’t weigh in on the gas situation here. I’m just one man. I have no more control of this situation than you do.” He must have rethought that, because shortly afterward, a headline screamed, “What’s with the gas prices in Arkadelphia?” He seemed to have a little influence, however, because the next day, prices were down. The situation had a spotlight on it. However, for the most part, he had been right. When the spotlight was turned off, guess what slowly began to happen? Again.

I once drove from Arkadelphia to the Florida Gulf Coast, and guess what? I saw no gas prices as high as Arkadelphia’s. Not even close.  The prices in the beach towns were similar, though. That’s fact. A friend drove from Arkadelphia to New Mexico along about that same time, and said he saw no prices as high as Arkadelphia on the way.  That’s scuttlebutt;  I didn’t actually see that

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For the last several years, I have attempted to handle my own gas situation by keeping a Walmart gas card handy, and filling up as much as possible at the Walmart in Malvern, or at any one of a number of stations at Hot Springs. Savings of 16 – 18 cents per gallon were not unusual, sometimes a good bit more.

A friend of a friend, who has a close friend who is an executive in an oil company who supplies this area, asked the question. The answer, “Well, we have several stations in the area. We just raised the prices at our stations, and everybody else went along.” That’s scuttlebutt.

I watched with great interest as a very large Pilot station was completed at Caddo Valley recently. Maybe, just maybe, I thought. But I didn’t get my hopes up too much. The day after they opened, I saw they were charging a competitive price, typical of the interstate, but well below our normal area prices.

I asked the manager. Are you going to be our salvation, or just a part of our problem?  Just in case he was not aware of our problem, I explained it in detail. He laughed. “Well, I noticed prices around us went down when we opened up yesterday.”

I’ve been watching. Closely. Pilot seems to be holding at about the average interstate prices. And, those around them are NOW more competitive. Once, I recently decided to use up my Walmart card. When I got to Malvern, I wound up paying above Caddo Valley prices. I’ve never been close to seeing that before, for a very long time.

Maybe the Cartel is weakening, or maybe this is just a pleasant little interlude. The proof is in the puddin’. Maybe we should all just forgive. But I ain’t’ forgitten’.