What’s driving prices so low in this SLO County city? A station’s push for ‘the cheapest gas’

When you think of the cheapest gas in San Luis Obispo County, where comes to mind?

It should be the Sinclair station in Morro Bay, station manager Kuldeep told The Tribune.

“We have a lot of customers who have faith in us,” Kuldeep, who declined to disclose his last name, said. “They just know the Sinclair is the only gas station where they can get the cheapest gas.”

As of Monday morning, the posted cash price for a regular gallon of gas at the Sinclair station, located at 940 Morro Bay Blvd., was $3.85. The debit and credit price was slightly higher at $3.95 per gallon.

Those prices were noticeably lower than those across much of the rest of San Luis Obispo County, where drivers have been more likely to pay upwards of $4.50 a gallon — if not higher — in recent months.

Kuldeep told The Tribune the owner of the Sinclair station prioritizes customer satisfaction over profits — and that means having the cheapest gas in town.

The owner chooses the lowest profit margin possible on gas prices each day, he said, noting that having the cheapest gas drives more people to the station and makes customers happier.

It’s a win-win situation.

“We feel very proud,” Kuldeep said. “We are giving the cheapest gas. ... Our main focus is customer satisfaction — when the customer is satisfied, they continue for a long time with us.”

The low profit margin also applies to the grocery store inside the station, Kuldeep added.

Beside helping local drivers’ wallets, Sinclair’s unique approach to setting prices has had ramifications on its neighboring stations.

It’s driven something of a “price war” in the region as the trio of stations on the same Morro Bay Boulevard roundabout next to Highway 1 compete for the best prices.

Most recently, the three appeared to be in a race to the bottom in December, with prices reaching a low of $3.59 per gallon just ahead of Christmas.

Though normally the Shell and Mobil stations on that stretch typically trail by about 2 cents, on Monday afternoon both dropped their cash price down to $3.84 per gallon — 1 cent lower than Sinclair’s. Debit and credit prices were all 10 cents higher than the posted cash prices.

Management at both the Shell and Mobil stations were unavailable to comment on the recent price battle raging on the roundabout, but in December, a Shell station employee told The Tribune the local station had “absolutely no control” over its prices. They said instead those were set by the corporate office.

National gas prices on the rise, analyst says

San Luis Obispo County gas prices have trended up in recent weeks, though they were still noticeably below the peak of $6.18 per gallon last October.

As of Monday, the average price for a gallon of regular gas in the county was $4.75, according to GasBuddy.com.

This made it the fourth most expensive metropolitan statistical area for gas in the United States, according to GasBuddy. It ranked below Ventura ($4.79), San Diego ($4.78) and Los Angeles ($4.77).

Gas prices nationally are only expected to go up, according to GasBuddy head of petroleum analysis Patrick De Haan.

“Roses are red, violets are blue, Valentine’s is over, and gas prices are going anywhere but lower,” De Haan said in a news release. “With Valentine’s Day now behind us, we have officially entered the time of year when gas prices traditionally start their spring fling, but we’ve already seen the streak of consecutive increases in the national average hit four weeks.”

De Haan said gas going up nearly eight weeks earlier than usual could mean an early end to jumps in price, but “anything can happen between now and then.”

“One of the most critical elements to how much gas prices will climb is how quickly and effectively refiners can finish their pre-summer maintenance, start producing EPA-mandated summer gasoline and build up supply of it before Memorial Day,” he said.

What do gas prices look like in SLO County?

Despite the general rise in prices, the Morro Bay gas stations have seen more than a ten cent drop since last week.

They remain as the cheapest stations in San Luis Obispo County, according to GasBuddy — and the only where the asking price was less than $4 per gallon.

The next-cheapest stations were in Paso Robles, where Fastrip Fuel & Wayside Liquors on Creston Road and VP Racing Fuels and One Stop Food on Spring Street all charged between $4.15 to $4.19 per gallon, according to GasBuddy data.

Meanwhile, all the usual suspects were among the most expensive stations in the area.

In Pismo Beach, the Chevron station at 340 Five Cities Drive was charging $5.75 per gallon as of Monday, according to GasBuddy. The Chevron at 701 Las Tablas Road in Templeton was charging the same.

That was followed by the Shell Station at 2699 Shell Beach Road in Shell Beach, which had a posted price of $5.59 per gallon as of Monday.