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Would You Pay $9.49 a Gallon For Gas?

Lots of gapers, few takers for gasoline at $9.49 a gallon. Sounds like a ridiculous price, right? But there was a time when $4.00 a gallon looked impossible, too. A group of independent Lukoil station operators pin it on pricing policies they call unfair and unethical.

Ilya Hemlin, Townsquare Media NJ

Fifty-seven dealers in New Jersey and Pennsylvania in the Gasoline, C-Store Automotive Association reset their prices to $8.00 or higher for the day to protest price strategies that they consider anti-competitive and unethical.

Among them are operators in Brick, Brielle, Holmdel and Monroe Township.

In essence, different dealers pay different prices for the same fuel, depending on where they’re situated. It’s known as zone pricing, and they say it dictates what you pay at the pump.

According to NJGCAA Executive Director Sal Risalvato, independents can expect a profit margin of no more than 10 cents per gallon. That’s before credit card fees, labor costs and overhead are deducted. It’s a margin, he says, that hasn’t budged in several decades.

Ameer Krass, a Lukoil franchisee, berates the company for charging different fuel rates even to independents in close proximity.  “If my own-branded competitor is selling fuel for less than I can buy it,” he fumes, “I might as well just run a hose from his station to mine.”

Lukoil officials call zone pricing a “commercially reasonable” practice that falls within New Jersey legal boundaries. Risalvato calls it a “dangerous game.” Lukoil goes on to claim that the NJGCAA encourages “public misstatements and ill-conceived actions” that hurt consumers.

Ilya Hemlin, Townsquare Media NJ

The Associated Press contributed to this story.

 

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