Posts Tagged ‘problems for old gas stations’

Old gas pumps can't handle new high prices

May 16, 2008

An AP article has bad news for lovers of old gas stations found along the Lincoln Highway or any old 2-lane. The newest challenge in trying to compete with modern stations is that older pumps typically top out at $3.99 per gallon, which seems likely to be passed very soon.

Click the AP image above for the full article. Here’s an excerpt:

The pumps, throwbacks to a bygone era on the American road, are difficult and expensive to upgrade, and replacing them is often out of the question for station owners who are still just scraping by.

Many of the same pumps can only count up to $99.99 for the total sale, preventing owners of some sport utility vehicles, vans, trucks and other gas-guzzlers to fill their tanks all the way.

As many as 8,500 of America’s 170,000 service stations have old-style meters that need to be fixed — about 17,000 individual pumps, said Bob Renkes, executive vice president of the Petroleum Equipment Institute of Tulsa, Oklahoma….

For many station owners — who, because of a relatively small profit margin on gas, aren’t raking in money even though gas prices are marching higher — replacing the pumps altogether with electronic ones is just not an option.

“The new ones run between $10,000 and $15,000 apiece,” Colville said. “It’s an expense that’s not worth it.”

Mechanical meters can be retrofitted with higher numbers when pump prices climb another dollar. The last time that happened was in late 2005, when gas went over $3 a gallon, and owners of the older pumps installed kits that went to $3.999.

The price of fixing the meters jumped in the past three years because old pumps are being phased out for new electronic pumps and demand for refurbished meters is down, Al Eichorn, vice president of PMP Corp., which makes the mechanical meters….

To deal with the problem, some state regulators are allowing half-pricing — displaying the price for a half-gallon of gas, then doubling the price shown on the meter….

“If gas is the profit driver and you are one of those guys with the old pumps, you’re either evolving or getting out,” said Jeff Lenard, spokesman for the National Association of Convenience Stores, a trade group that represents about 115,000 stores that sell gasoline.