April 06, 2020

Fuel war pleases buyers > Prices plummet at Madawaska

MADAWASKA — Heating oil and gasoline consumers in Madawaska are smiling these days as they enjoy some of the lowest heating oil costs in New England and one of the lowest gasoline prices in Maine.

Prepaid heating oil contracts could be purchased for 72.9 cents a gallon last September from all heating oil dealers in Madawaska. In other parts of the state, similar prepaid contracts were offering more than 90 cents a gallon for heating oil.

Prices for regular, unleaded gasoline in Madawaska on Friday were as low as $1.139 a gallon, about 16 cents lower than the same fuel in neighboring Fort Kent and Van Buren and 14 cents lower than in neighboring Frenchville and St. David.

While it is a consumer’s dream, the situation is a nightmare for retailers caught up in what some have called a price war between two heating oil wholesalers. The disagreement, some believe, started over heating oil and then moved into gasoline sales.

Larry Beaulieu, owner of JSB Energy Inc., bought gasoline supplies from Dead River, until he had a falling out with the company six years ago. He said Dead River tried to take away some of his gasoline customers. So then Beaulieu switched to Webber Fuel Co. in Bangor to buy wholesale gas and oil products.

Beaulieu, who operates Larry’s One Stop Corner Convenience Store, pumps gasoline, and has been a heating fuel wholesaler the last four years.

He told people at a public meeting in Frenchville in October, “It’s because of me that you pay the lowest heating oil and gasoline prices in Maine.”

But Beaulieu isn’t entirely pleased that prices are at rock bottom. “You’re damn right,” said Beaulieu on Friday, who added that prices were so low that it was hard for him to stay in business.

“It is an effort by Dead River to drive me out,” he said.

“You see,” said Beaulieu, who was interviewed at his fuel oil bulk station at Frenchville on Friday, “we are only two independents in this town. That’s me and Tim [of Bob’s Service Center]. Dead River instigated the $1.139 price and DOC’s [Daigle Oil Co.] followed a few days later.”

“Irving Oil, who can stand any price they want to, came down to $1.169, like my price,” said Beaulieu.

“It’s all directly related to my heating oil business. Dead River is really applying the pressure,” said Beaulieu.

Nelson Jandreau, district manager for Dead River in Madawaska, said Beaulieu’s claims that his company wanted to drive JSB Energy out of business were incorrect.

“Madawaska is a competitive market. The dealer network here is very sensitive. We will not allow any competitor to sell at a price lower than us,” said Jandreau.

He denied that Dead River was trying to run Beaulieu out of business. “It’s not our aim,” said Jandreau.

Daniel Vaillancourt, general manager of Daigle Oil Co. at Fort Kent, said, “We have a policy that we will be competitive on the street. We have been a market follower. We are just following the whole mess around.”

DOC’s station and Dead River’s station are the two outlets in Madawaska where gasoline is sold for $1.139 a gallon.

Vaillancourt said, “We are selling close to cost, without operational expenses included. We, like several others, are a bystander. It’s potentially devastating to other people in the market, but it’s a market condition we have to live with it. We have to protect ourselves and that’s why we are in it.”

“Madawaska is one of cheapest heating markets in New England in last two years. It is artificially deflated at a level that it cannot sustain business. Somebody’s going to die,” said Vaillancourt.

Vaillancourt said a normal price for regular, unleaded gasoline in the St. John Valley should be in the high $1.20s. “Right now it’s among the lowest in Maine and transportation costs to Madawaska is the highest in Maine.” Gas and oil for the region is trucked in by wholesalers from Bangor.

Paul Bernier owns Paul’s Gas and Car Wash in Frenchville, just seven miles from downtown Madawaska. He’s in the middle of two markets, Fort Kent and Madawaska, and has lived with that for years.

This year, Bernier said, “These gas prices are hurting me a lot. My gasoline sales for October and November are down, conservatively, by $10,000 compared to 1996. The prices elsewhere in northern Maine are where they should be, except for Madawaska.”

Bernier believes the situation was created by a “four-year ongoing battle which started with heating oil contracts. When one wants to get at the other, they drop prices.”

Bernier agrees with Beaulieu’s assessment of the situation.

“Dead River has been upset with Larry Beaulieu ever since he got into the oil business and started taking customers away from Dead River. Their game plan is to get Beaulieu out,” said Bernier.

“It’s a case of I’ll fix your wagon,” Bernier continued. “Dead River can afford to lose money, we can’t. They are selling just a couple of cents above cost. Dead River has nothing to lose and everything to gain,” said Bernier.

“When one wants to get at the other one, they go at it,” said Bernier of the Beaulieu-Dead River feud.

Robert Williams sells gasoline at Bob’s Neighborhood Store in St. David, two miles east of Dead River’s retail gasoline outlet on East Main Street.

“All the stations are losing money at these prices. I’ve had to cut back on my employee hours because of the loss,” said Williams.

Williams declined to comment on why the prices are so low in Madawaska.

Tim Lausier operates Bob’s Service Center on West Main Street at Madawaska. He said, “The checkbook is getting smaller.”

While he would not talk about specifics, Lausier said, “It’s a case of someone trying to hurt someone else.”

Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like