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Costco to Sanders: "Our Prices on Average Would Have Been Approximately 19¢ Lower'

Press Release

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Location: Washington, DC

A Costco senior executive told Sen. Bernie Sanders (I-Vt.) that the company would have sold gasoline for 19 cents a gallon less than the average price charged by gas stations in the Burlington, Vt., area during the past two years.

The company that wants to open a service station at its Colchester, Vt., warehouse store charged that potential rivals have used an environmental review process to "stifle competition." In a letter to Sanders, Executive Vice President Joe Portera said Costo would have charged 25 cents a gallon less for premium gas than other stations in the area.

"I am concerned that for a long time now gas prices in Chittenden, Franklin, Grand Isle and Lamoille counties have been substantially higher than in the rest of the state of Vermont and in the nation," Sanders said. "I believe that has a lot to do with the non-competitive market in which a few companies are able to dictate prices."

Costco since 2007 has sought permits to sell gas at its Colchester store but encountered opposition from Burlington-area gas dealers. "We have obtained several approvals for our proposed gas station in Colchester, but each approval has been appealed by, among others, gas station owners in northern Vermont. We can discern no legitimate reason for these appeals, and believe that they are really an attempt to use the land use process to stifle competition for gas sales," the letter said.

"We applaud your efforts to promote competition in the gasoline business in northern Vermont, which will lead to more rational and competitive pricing for your constituents and our members," the Costco executive told Sanders.
On July 2, Sanders called for a federal investigation into unusually high gasoline prices in the greater Burlington area compared to other parts of Vermont.
On July 5, the senator made public information showing gasoline prices in Burlington last month were 10 cents to 43 cents greater than a Federal Trade Commission computer model projected they should be.

On July 13, Sanders revealed that gasoline profit margins in the Burlington area in June were double the national average, according to a leading, independent fuel price research firm. Burlington was the most lucrative gas market in the Northeast, according to the Oil Price Information Service.


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