Local gasoline terminals to close, will drive up price

By WEEK Producer

January 17, 2013 Updated Jan 18, 2013 at 12:02 AM CDT

PEORIA, Ill. -- Peoria service station owner Terry Beachler hears complaints about gas prices all of the time. He warns that soon, when a pair of local gasoline distribution terminals in Chillicothe and Mossville shut down, the price will go up even more.

"The terminals are going to shut down at the end of this month," Beachler said, "and it will probably add around two-cents a gallon to freight costs that will be permanently embedded in the price. It also makes it a little bit more inconvenient for us retailers."

Those distribution terminals are where most Peoria area service stations currently get their gas. The pipeline that feeds them is old and the government wants them replaced. That would cost millions of dollars, so instead they are closing.

Beachler says in addition to the extra two-cents per gallon in freight costs that will be passed on to consumers, it will be harder for local gas stations to take advantage of a sudden drop in price.

"Sometimes we're able to buy at a little lower price because of the timing of price changes and the convenience of a nearby terminal," said Beachler. "As we go down the road here it looks like about an hour-and-a-half each way to get to a terminal in Heyworth, Illinois, or near the Quad Cities."

That means if you drive 300 miles a week, and your car gets 30 miles per gallon, the shuttering of the two local distribution terminals will cost you about $10 a year extra at the pump.

Meanwhile, Peoria has also floated the idea of doubling the city's gas tax from two-cents to four-cents. That would bump the price even more.

However, the mayor put the brakes on that talk Thursday, saying the closing of the terminals would fuel enough pain by itself.

"It may have an impact on what we pay for fuel just because the station owners are going to have pay more money to get the fuel here," Ardis said. "I don't think that, at this point in time, we're going to want to contemplate adding money on top of what may be an increase as well."

Motorists will be glad to hear that.