As federal lawmakers debate off-shore drilling and cracking down on oil speculators as ways to reduce energy costs, Capital Region drivers can increasingly count on relief at the pump from Andrew Jackson and George Washington.
A growing number of area convenience stores are offering cheaper gasoline prices to customers who pay with cash instead of credit cards. Some of those stores are in Guilderland, Niskayuna and Colonie.
Gas retailers are establishing a dual pricing system, which enables them to dodge increasingly heavy credit card fees for gas purchases while also providing their customers a few cents of relief per gallon at the pump.
Stewart’s Shops two weeks ago started talking to the state Department of Agriculture and Markets about modifying a price posting regulation so the Saratoga Springs-based convenience store chain can charge lower prices for cash gas purchases. Sixty percent of Stewart’s customers use credit cards at pay-at-the-pump stations, according to Stewart’s marketing manager, Tom Mailey.
“Can we bring some of that over [to cash payments] with cash benefits? We assume there is a market for that,” said Mailey.
Discounted prices for cash also force consumers to enter station convenience stores, raising the likelihood they will make impulse purchases on food and drinks. But the dual pricing system can also confuse consumers who are lured into stations with low cash gas prices, even though they intend to pay with credit cards.
“It’s certainly something the motorist wants to be aware of when they pull into a station,” said AAA Northway spokesman Eric Stigberg.
The Mobil station on Balltown Road in Niskayuna last week started offering cheaper prices for cash-paying gas customers. On Thursday, the station was charging $4.05 per gallon of regular gas for cash purchases and $4.12 per gallon for credit purchases — a savings of 7 cents per gallon.
The average cost of a gallon of gas in the Capital Region on Thursday was $4.16, up from $3.04 a year earlier, according to the AAA Fuel Gauge Report.
Credit card fees can cost retailers up to 3 percent for every gallon of gas they sell. With wholesale gas prices way up and sales volumes dropping, retailers’ profit margins are being pinched more by credit card fees.
“The margins have been squeezed down to next to nothing, and when you add the credit card fees it gets that much worse,” said Dennis Kugler, who runs the Niskayuna Mobil.
Kugler also owns the Sunoco station on Erie Boulevard in Schenectady. He said the dual pricing system will not be implemented there because Sunoco prohibits its stations from charging different prices for cash and credit purchases.
Other Capital Region stations that charge less for cash gas purchases include a Citgo on Western Avenue in Guilderland and a Mobil on Route 7 in Colonie. The Guilderland Citgo was charging $4.10 for a gallon of regular gas, compared with $4.15 per gallon with a credit card.
“Any option that’s easy on the pocket would be appreciated,” said Mahmood Hakak, a Siena College creative arts associate professor. Hakak was filling up his gold Dodge Stratus at the Niskayuna Mobil, ultimately costing him $51 for 12.6 gallons of gas.
The Mobil station is reserving one of its three two-pump islands for cash-only purchases. Stewart’s has not been able to offer a dual pricing system at its 271 gas stations because most stores lack enough pumps to devote an entire row of them to one form of payment.
Agriculture and Markets’ Bureau of Weights an Measures requires electronic devices on gas pumps to calculate prices in front of customers as they fill up. Mailey said Stewart’s would have to upgrade the software of hundreds of pumps so they can calculate both cash and credit gas prices.
Stewart’s does not consider the pump software upgrade option feasible. The company wants the state to modify the price posting regulation so it can offer the cash benefit on gas purchases, Mailey said.
An Ag and Markets spokeswoman did not immediately respond to a question concerning the regulation.
Jim Calvin, president of the New York State Association of Convenience Stores, said he first started noticing gas retailers offering cash payment benefits six months ago. He said retailers have experimented with dual pricing systems in the past, but those practices have often petered out after short periods.
“You see [dual pricing] from time to time here and there. It does seem to be more common now than before because of prices and credit card fees,” Calvin said.