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Record Fuel Prices Pose Challenges For Gas Stations
5/2/2008 3:06:38 PM Soaring fuel prices are hitting hard nationwide, leading consumers to cut back on other spending and recreational driving. For many Americans, gas prices over $4 a gallon is tough to imagine. For some gas stations it was unimaginable - literally - and owners are struggling to deal with a litany of problems, from rude customers to increased drive-offs.
For the majority of Americans, cutting back in other areas of spending is enough to offset the nationwide average rapidly approaching $4 a gallon. For others, breaking the law is becoming the option of choice - specifically, the gas station drive-off.
In April 2004, gas station owners across the country were worried. At the time, gas prices were nearing $2 a gallon, a new record. At $1.86 a gallon, these prices had sparked a 200 to 300 percent surge in drive-offs.
“We just had someone drive off yesterday," Nasir Ehmed of Hit or Miss Mobil in Middletown told the Associated Press in a story published April 6, 2004. "The prices are too high; people can't afford it.”
Fast forward four years, and gas prices are rapidly approaching a nationwide average of $4 per gallon and are expected to hit that mark just in time for the summer driving season. Accordingly, gas stations are experiencing a host of problems, from rude customers to equipment problems to drive-offs.
One way to prevent drive-offs is requiring customers to pre-pay, an increasingly popular choice among gas station owners. In some areas of the country, using pre-pay has actually decreased the number of drive-offs despite soaring prices.
Steve Turner, chairman of the Petroleum Manufacturers Association of America, told RTT News that his stations are now all pre-pay.
“In the last six to nine months in our particular company, we had gone to either full pre-pay or we had gone to a variation of where pre-pay was from 6 pm to 6 am in what I call the rural markets,” Turner said. “In the metropolitan area, we had to go 24 hour pre-pay because of drive-offs in excess of $1,000 per month per store.”
Another problem presented to some gas stations is the programming of analog pumps. Some are not programmed to read above $3.99 a gallon, posing a problem for gas station owners. During the fuel crisis of the 1970s, prior to the advent of the digital pumps, station owners were forced to sell gas by the half-gallon as prices rose above what the analog pumps could show.
Today, gas stations in certain states are being granted permission to do the same, as diesel prices are now solidly above $4 per gallon. Stations are allowed to advertise gas per the half gallon so long as the signs are large enough and customers are not confused by the price.
“We had this same problem years ago when we went over $2 and $3, typically sites like that go to half-gallon pricing,” Turner said. “Now, in most states…it's illegal to have that, but typically they come in and give you 2 months to get your equipment upgraded.”
In addition, for most pumps there is a limit to the cost of fuel distributed at one time. Some pumps top out at $99.99 - or around 25 gallons if gas reaches $4 a gallon. For large vehicles whose tanks exceed 25 gallons, filling up won't only be painful in terms of cost - it will be impossible to go all the way from empty to full.
In mid-afternoon trading Friday, crude oil was trading around $116 a barrel. |
