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More Gas Stations Switching to Cash Versus Credit Pricing

Local expert says blames tough profit margins and increased credit card fees for increases when paying by credit/debit for gasoline.

It is no secret that gas prices are on the rise across the nation. But locally, it seems like the margin between cash and credit prices at local stations is increasing as well. Add in several closed gas stations in recent months, and it's a tough time just to fill your tank.

Several gas stations in Toms River and the surrounding area have switched from one price per gallon, to separate prices when paying by cash versus credit.

These changes are not sudden and can be blamed on a low profit margin, according to Fred Rozell of the Wall Township-based Oil Price Information Service (OPIS).  Rozell is the Director of Retail Pricing for the internationally recognized organization.

"The average profit per gallon sold for a local gas station was about 18 cents in 2011, but the profit has been as low as 9 cents in recent years. It averages about 14 cents a gallon," Rozell said.

OPIS estimates that credit card fees for gas stations range from 2.5-3 percent of sales. The Association for Convenience & Fuel Retailing says that credit and debit card fees averaged 4.7 cents per gallon when factoring in all gasoline sales (cash or credit) in 2009.

"It's hard to operate at such a low profit margin when most of these stations are probably only doing about $50,000-$80,000 of business a month.

In Toms River, the Exxon located at 1299 Hooper Avenue, and the Lukoil at Routes 166 and 571 recently closed. At the same intersection of Lukoil, the Shell station is now separate pricing for cash and credit.

Many gas stations, except Wawas, seem to display a different price for cash or credit purchases.

Wawa operates six gas stations in Toms River, and all offer the same per-gallon price regardless of the method payment. How can this be? The answer is simple, Rozell said: convenience stores make the difference.

"Wawas are doing about $500,000 a month in business, and the trick is they're getting people inside. If a gas station doesn't have a popular convenience store, they're in trouble," Rozell said.

Local representatives from Wawa, Exxon and Shell did not return Patch's phone calls about their profits and credit fees.

The switch to separate pricing for gasoline is not hard for consumers to notice. Toms River resident Mandy Pearce said she'd be surprised if any consumers were happy about the change. For her, it's a matter of convenience.

"I don't carry that much cash on me," Pearce said. "Why penalize me for that?"

Beachwood resident Kim Hartman said as a result of the switch she's seeking out locations that still offer the same price no matter how you pay. Most cases, that's Wawa.

She doesn't buy the argument that credit card fees are eating into gas station profits. "Maybe for a smaller independent station, but for a big company like Shell or Exxon, it doesn't add up."

Rozell says consumers shouldn't see an increased credit price as a penalty, but instead as a nature of the business.

And if you're looking for relief at the pump any time soon, think again.

"Prices should remain erratic through the spring, but we could hit record levels before Memorial Day" according to Rozell.

Catherine Galioto contributed to this report.

Alan K February 03, 2012 at 11:42 AM
The way to save money is via self serve gas. NJ is stuck in the 1940's with the no self serve laws. In the rest of the US drivers pump their own and save at least 10 cents per gallon. Add in the time saved not having to wait and self serve is the way to go!
suz February 03, 2012 at 01:34 PM
Self service does not necessarily save you $. On a trip to PA (Harrisburg area) in the Fall, gas prices were up to .50 cents higher on self service. Having gone to DC a few times a year, the same applies. Probably NJ as self service stations would also see an increase in "gas and go" with the stuff going on in Ocean County lately! I think the increase is due to the warmer winter we are having and they (oil companies) need to make a profit somewhere. Oh, by the way, I too do not carry much cash and prefer to use my debit. Stick to WaWa or Holiday on Rt #37.
proudnot2bliberal February 03, 2012 at 04:29 PM
Sue sorry the reason NJ prices are cheaper is because of the LOWER TAX the other states have a higher tax on gas thus the higher prices. Its basic math people if you dont have to pay peopel to pump gas it will be cheaper. My brother who travels on business b/w New England & DC area WILL NOT get gas in NJ even if its cheaper because of the 1/2 to 1 hour wait fo a schumck to pump gas. Oh btw youcant let you car idle for 3 mins to run in to pick up a coffee but MUST wait 30 -60 mins to get gas on the turnpike
proudnot2bliberal February 03, 2012 at 04:31 PM
When traveling out of NJ its a hoot watching NJ drivers trying to figure out how to pump gas... totally clueless
LiveinTR February 03, 2012 at 04:45 PM
I lived in another state when it switched from all full serve to allow self serve. Prices on self serve did not go down. The gas stations wanted to preserve their gross sales numbers and gross profit (before expenses). Instead what was the full serve price became the self serve price, and they just increased the price for the full serve. The dealers all pushed for self serve knowing they would do this as it was a way to increase their revenue and profits. They knew they would not be lowering the self serve prices.
Eggs-n-Toast February 03, 2012 at 05:36 PM
I don't know about you... But I don't want to pump my own gas! LOL When it's 10 degrees out, or pouring rain, or I'm all dressed up to go out somewhere nice, last thing I want to do is stand outside, handle a dirty gas pump and smell like gasoline! Besides, people need jobs, and pumping gas and helping motorists with oil checks, directions, etc is an honest job. Should even pay more than it does, but, still -- it's work. And if you believe gas will STAY cheaper in NJ because we'll pump our own, you're living in dreamland. They get that $$ from you one way or another....
StayCalm February 03, 2012 at 07:42 PM
Does anyone know if customers pump their own gas in European countries? I don't know if they do or not, but I do know in America we pay about HALF what they pay per gallon (or liter) in Europe... Either way, gas prices are generally influenced globally, not going to make much difference if we pump our own or not. IMO, it's worth the couple of pennies per gallon NOT to have to pump my own.
bayway mike February 03, 2012 at 07:46 PM
The race to $4 a gallon is on!! The oil companies 1st quarter profits should be great at our expenses..
KingNeptune February 04, 2012 at 02:09 AM
Typical lazy NJ resident. And BTW, when was the last time any full serve station checked your oil. Wawa has a sign saying they pump jockeys are only trained to pump gas and nothing else. Full serve in NJ means waiting for one guy running 6 pumps to get to you, stick the nozzle in your car and collect your money.
Eggs-n-Toast February 04, 2012 at 04:14 PM
MrCommonSense- Until recently my husband managed a local service station - for more than 14 yrs. If you pulled into his station any time, day or night, and needed to check your oil or water... he did it for you, and/or would make sure other employees did it too. He also put in oil, water, or air in your tires if needed -- and still cleaned your windshield if you asked. Everyone in the town knew him, trusted him, and depended on him more than once in emergency situations. He also reported more than a few drunk drivers to police over the years and got them off the roads before they killed someone or themselves. "Pump Jockey"? Not nice of you to degrade folks doing an honest job for shitty pay. But hey, some people always feel it's necessary to put other people down.... I don't want to pump my own gas, so what. Lazy? Of course *you* would think so. I just prefer to avoid gas fume headaches and dirty hands. Climb off your high horse, sir.
KingNeptune February 06, 2012 at 06:21 AM
You are living in the past. Like I said most full stations just pump gas, that's it. Full serve means waiting to have someone else do what I could do myself in half the time. Plus I don't have to worry about some minimum wage punk skimming my credit card.

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