Bay Area gas station owner keeping fuel prices low as statewide average goes up

If a tank of gas seems to be getting more expensive, it's not just your imagination. Prices have gone up 10 cents in a week, more than 60 cents in the last month. 

Industry experts said it's due to supply cuts and some Southern California refineries being offline. The statewide average sits at $5.89 a gallon, but at an Arco station in Mill Valley, the price for regular unleaded is $5.59 a gallon. 

The lower prices at the gas station are Marin's worst-kept secret, and the owner said his customers are the reason why his prices are so low.

Mike Shamsian bought the gas station in 1995. The prices have gone up dramatically since then.

He said, "One time, the price was at 99 cents."

The price at the pump has skyrocketed just in recent weeks but customers at the Arco will say that the gas station is still the best in town.

"Because it's the cheapest," Belle Stafford said.

It's so popular that a line of cars sometimes backs up to the shoulder of highway 101. Mike Shamsian calls his business the Costco of gas stations. 

He explains, "You go to Costco, probably whatever item that they have, you cannot find it anywhere at that price at the same time, it's good quality product. So you keep going and keep shopping. It's pretty much the same idea here."

Shamsian relies on the volume of business. He didn't say how much his margins are but he's able to set smaller margins to keep prices low.

He said, "We hate the high prices, just as much as the customers do."

It's not good for his business when prices jump. Higher prices to him translate to fewer gallons sold. He adds, "When they do go up, people get sensitive, they get nervous and they use less. They pump less."

Nobody knows when prices will go down. Industry experts say they may even go up further as Northern California refineries send supplies south until refineries impacted by Tropical Storm Hilary come back online.