Self-service gasoline-a bargain at least through Thanksgiving
American motorists are still riding a crest of favorable gasoline prices -especially at the self-service pump -and are driving significantly more than last year.Skip to next paragraph
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Some stations across the United States are selling self-service gasoline for as much as 20 cents a gallon less than full-service, according to the American Automobile Association. In fact, the price gap between self-service and full-service gas, which has been growing since Easter, is expected to continue to grow at least through Thanksgiving, the AAA's Melita Hartung industry analysts say.
The AAA's most recent national Survey of gasoline prices (released last month and based on figures from about 6,000 stations) showed the average price for full-service regular to be $1.387 a gallon, compared with the average price for self-service regular of $1.292; the average price for full-service unleaded was
Several factors are depressing self-service prices, industry analysts report. These factors include: generally flagging gasoline sales (despite the rise in driving this year compared with last), sparking local price wars; pressure by the oil companies on their dealers either to sell more gasoline or close up shop; and many more dealers using self-service as a "loss leader" to bring in business for more lucrative maintenance and repair work.
The Federal Highway Administration reports that driving on the nation's primary highways was up 3.6 percent for the first six months of 1981 from the same period in 1980, or 253.3 billion miles compared with 244.5 billion miles. Preliminary AAA surveys conclude that driving will be up from July to December as well.
Nevertheless, more fuel efficient cars, coupled with the steep general decline from driving levels of several years ago and the world "oil glut," fueling intense competition and price slashing, has prevented most gasoline dealers from cashing in on the surge in driving this year. In fact, the US Commerce Department has projected that as many as 6,000 stations would go out of business this year.
The Service Station Dealers of America (SSDA), representing some 60,000 dealers, says the decline will be even sharper.
Many dealers -especially those who lease their stations from major oil companies -are caught in a squeeze between many oil companies urging stations to sell more gas at lower prices and a motoring public shopping for the best buy, says Joseph Grish, president of SSDA.
As a result, "many of the dealers today throughout the countryside are selling self-service gasoline at cost or lower than cost," he says, in an effort not only to please oil companies that have threatened to close unproductive stations but also to compete against oil company owned and operated stations that may be better able to afford price competition.
Oil company spokesmen contend, on the other hand, that they are only employing good business sense when they urge their owned and operated stations to sell gasoline at the lowest possible price -and then hope customers will be drawn to buy other station services.
Moreover, to spur gasoline sales in stations they don't operate, many oil companies have offered dealers gas price "discount allowances" if they keep sales volume high.