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REARDAN, Washington (AP)
-- Small service stations are running into a problem as gasoline marches
toward $4 a gallon in the United States: Thousands of old-fashioned
pumps can't register more than $3.99 on their spinning mechanical dials.
Chip Colville has old-style gas pumps at his Chevron station in Reardan,
Washington.
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.
At Chip Colville's Chevron station in this eastern Washington town,
where men in the family have pumped gas since 1919, three stubby, gray
pumps were installed when gas was less than $1 a gallon. They top out at
$3.999, only 30 cents above the price of regular gas at the station.
"In small towns, where you don't have the volume, there's no way you can
afford to pay for the replacements for these old pumps," Colville said.
"It's just not economically feasible."
The problem is worse in extremely rural areas, where "this might be the
only pump in town that people can access," said Mike Rud, director of
the North Dakota Petroleum Marketers Association.
Demand for replacements has caused a months-long backlog for companies
that make or rebuild the mechanical meters -- and that is just for
stations that can afford the upgrade.
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.
The Avon, Connecticut, company has hired extra employees, who are
working overtime, but still has a 14-week backlog of orders, Eichorn
said.
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.
In North Dakota, regulators recently told service stations their
mechanical pumps could use half-pricing, provided they use signs to
alert costumers and find a permanent solution by April 2009.
South Dakota is preparing similar rules, officials say. And in
Minnesota, rural service station owners whose pumps cannot display the
right price are being told to cover up the incorrect numbers.
Across the United States, the average price for a gallon of gasoline
rose past $3.70 Sunday, while diesel was selling for an average of $4.33
a gallon, according to
AAA and the Oil Price Information Service.
The price does not compare with what many people in Europe pay, but with
Americans accustomed to paying some of the lowest gasoline prices among
developed nations, the price spike has come as an unwelcome surprise.
Small stations are struggling to make a profit on gas, even as the price
rises. The small profit margin makes gas less lucrative than snacks and
other products the stores sell inside.
"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.
"If you're just that kind of image of the '50s gas station where you
have a conversation, fill up and have a cup of coffee, that's in the
movies."
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