TodayNot everyone happy about falling pump prices
Independent gas stations rely on other sales — car repairs, convenience business — to turn profits.
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Gas prices around the Carlisle area have dipped below the $2 mark for the first time in several years. (Jason Malmont/The Sentinel)
Tumbling gas prices may have consumers excited — especially those in the Carlisle area, where regular unleaded is below $2 per gallon at the majority of filling stations — but not everybody is benefiting from the steady declines.
Scott Royer is one of those people.
As an independent Gulf distributor, Royer, who owns Royer’s Gulf on York Road in Carlisle, isn’t able to drop his gas prices every day like the wholesale stations around him.
The Kwik Fill across the street was selling gas at $2.01 — $1.96 for credit card purchases — while the Hess station down the road on East High Street posted a $1.99 per gallon price late Saturday morning.
Vehicles lined up at both locations to fill up. Royer’s sat idle at $2.19 per gallon.
“The bigger companies can change two or three times a day,” Royer said. “What we have in the ground, we need to get that down to order and drop our price.”
Royer’s last fuel delivery came on Election Day. That may be the last time he fills up for a week or two, maybe longer.
By then, most of the stations in the area may have lowered their prices several times.
The lowest price reported Saturday was $1.88 per gallon (cash price) at the Universal station on the Harrisburg Pike in Middlesex Township.
Royer is sure he is losing customers because of his pump price, he said, but there isn’t much he can do about it without taking a hit.
As gas prices started dropping fast last month, he lost about 50 cents per gallon, he explained, just to get rid of the inventory and get back on track.
If that continues, he will probably have to take a loss again.
“I don’t have the corporate backing to call and ask them to drop the price,” he said about his limited partnership with Gulf. “They don’t give us the power to drop our price.”
Right now, he is only making between 1 and 1.5 cents per gallon on credit card purchases and between 3.5 to 4 cents per gallon on cash fill-ups.
Making it up
Fortunately for Royer, he has a repair shop to fall back on, which accounts for the majority of his sales.
The fact is many independents bank on other sales like car repairs or a convenience store business, selling lottery tickets and tobacco products, to turn a profit.
They learned long ago not to rely on gas sales to stay in business, said Ross DiBono, executive director of the Pennsylvania Gasoline Retailers Association & Allied Trades, based in Philadelphia.
“The alternative is to close your doors and go out of business,” he said. “Unfortunately, we’ve seen some of that, too.”
According to DiBono, independent owners who make their own contracts for gas delivery make up about 25 percent of all gas stations in Pennsylvania.
“They buy gas today and it may take them five or six days to sell that gas,” he said. Meanwhile, “tomorrow gas may drop five or six cents a gallon. It is a problem. With the emergence of the big-box stations (such as Wal-Mart and Giant gas stations), it’s becoming more and more of a problem for our guys.”
DiBono added: “The gas is dropping every day and that’s not a good thing for our guys. It’s great for consumers, but not for our guys.”
Give it up
Keeping the eight pumps Royer’s has — six unleaded gas and two diesel — is not about making money, the owner explained. It’s about tradition. His father started the business in the 1960s and he likes providing the full service to customers.
“We’re trying to hold on to those old-time values,” he said. “It’s a draw. We’ve built a lot of relationships over the years.”
There are not a lot of places left where people can get the little things done, he added. Full service at his station includes washing windows and checking oil, tire air pressure and topping off car fluids.
“It’s not a quick in and out,” he said. “People like that.”
Royer also made a big investment — between $200,000 and $225,000 — to upgrade his underground fuel tanks and pumps to comply with federal regulations back in 1995. He expects it would be quite costly to remove them now.
