Why gas stations can get away with this is beyond me:
The price of gas on a given day can be difficult to gauge, especially given that prices often fluctuate wildly from station to station, even when they are less than a mile a part.
The phenomena is due to an oil refinery practice called zone pricing — when oil companies charge retail suppliers gasoline based on geographic zones created by the refiners, said Sal Risalvato, executive director of the New Jersey Gasoline-C-Store-Automotive Association.
Essentially, according to retailers, the wholesalers gauge the affluence of an area — or its proximity to, say, the NJ Turnpike — and adjust their prices to maximize profit. So prices in Princeton tend to be higher than prices in South Brunswick, though prices along Route 1 are often higher than on Route 130.
The approach might seem an acceptible outgrowth of the market — capitalism at work — but the reality is that the fuel companies are taking advantage of the retail stations knowing that the public doesn’t distinguish between the station owner who fills their tank and takes their cash and the larger oil companies who make the big profits.
Hence, the legislation being proposed by Assemblyman Jon Bramnick, R-Westfield.
(He) has proposed a bill co-sponsored by members of both parties that would change the law to prevent zone pricing. The legislation was proposed in January, and is currently in committee.
“If it is sold at $3.75 a gallon to a station, then it should be sold throughout the whole state at that price,” Mr. Bramnick said. “That’s the only thing that makes sense.”
Mr. Bramnick said the law allows for zones because of the differences in shipping costs from refineries to stations, but he wants to eliminate the oil companies’ ability to use zone pricing because they are not using it for that purpose.
Risalvato, of the gas station association, sums it up nicely.
“Does Burger King charge one restaurant one price for Whopper patties, and then charge another Burger King two blocks down the road a different price? I don’t think so. Stations are at the whims of the oil companies,” Mr. Risalvato said. “It is understandable to charge a retailer who is farther from the refinery more because of the cost to deliver the fuel, but they can’t say what they are doing is because of transportation.”
Hank Kalet 