Page Two: What Gas Stations Won't Tell You

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By Jim Rendon

6. "Looking for the cheapest gas in town? Try the Internet." You can't actually buy gas online, but Web resources can help you find the cheapest fill-up in town. Rising prices have sparked a whole network of sites that post and continually update gas prices at stations across the country. Among them, GasPriceWatch.com and Gaswatch.info help people track pump prices. But the most comprehensive of the bunch is GasBuddy.com, which includes a network of 174 local sites, complete with maps and message boards, that tally gas price by zip code. "People are frustrated by the variation in the price of gas," says GasBuddy.com cofounder Jason Toews, and they're using the Internet to take control.

It has worked wonders for Sue Foust. Every day, as she passes roughly 10 stations on her commute across Tucson, Foust makes a mental note of their prices, then posts them on TucsonGasPrices.com, a local affiliate of GasBuddy.com. Then every four days or so, when she needs to fill up, she checks the prices others have posted in her area. It turned out the Shell station she used to frequent is one of the most expensive in the city. Now she fills up elsewhere. "I really do feel like I'm saving money," she says.

7. "It's a gallon when I say it's a gallon." It's hard to know if you're getting all the gas you paid for at the pump. But in some places there's a very good chance you're not. The state or county weights-and-measures department usually checks pumps for accuracy, but in some areas it can be years between inspections. Arizona, for example, has only 18 staff members to check the state's 2,300 stations. That means stations there can expect a visit once every three to four years, according to Steve Meissner, an Arizona Department of Weights and Measures spokesperson. Last year 30% of the more than 2,000 complaints the department received were valid, and it levied $167,000 in fines.

The good news is that it's often easy to catch the most common problem: Older pumps in poor repair may begin charging you for gas before you've pumped it. Check the meter to make sure it registers $0.00 before you begin and doesn't start charging you before the fuel is flowing.

8. "I might gouge you on a soda, but my coffee's a bargain." With margins on gas taking a hit, stations are increasingly looking to their convenience stores for income. In 2005 gross margins for in-store sales were 30%, while the margin on fuel was 7.2%, according to the National Association of Convenience Stores. Given the stats, you'd assume the average Kwik-E-Mart to be a terrible place to buy just about anything. But that's only partially true.

Stock that usually sits on the shelf does tend to be vastly overpriced, so if you forgot ketchup on the way to a barbecue, you can bet you'll pay a lot more for it at a gas station than you would at a supermarket, says David Bishop, director of convenience retailing for Bishop Consulting. What about popular beverages? You'll pay more for a 20-ounce soda at a gas station than you would for a 2-liter bottle in a supermarket; the average price for a liter of water at pumpside marts in 2005 was $1.24, a markup of 55% over wholesale; and energy drinks cost 50% over wholesale, according to Bishop.

But there are bargains to be had: Some high-volume goods, such as cigarettes and beer, are often competitively priced at gas stations. And a cup of coffee goes for a fraction of what you'd pay at Starbucks.

9. "If you're having car trouble, you're in the wrong place." The days of the local gas station staffed with a skilled mechanic have all but come to an end. Station owners are swapping car lifts for beverage cases and car washes, anything that brings in a high-volume stream of income and traffic, says Dennis DeCota, executive director of the California Service Station and Automotive Repair Association. The more people who pull over for a soda, the greater the chance they'll top off their tank and vice versa, the thinking goes. Few owners want the hassle of a business like car repair even if it earns the same amount of money as a convenience store.

In addition, repairing cars is increasingly expensive, and the ill will and potential liability from a fix-it job gone wrong are more of a headache than many owners are willing to risk. Today a service station can require $100,000 worth of diagnostic equipment, a significant investment. It's a risky venture with little payoff, says Southern California station owner Arabshahi. In fact, Arabshahi removed the service station from one of his locations after he bought it. "I don't have a service station because I am not a mechanic," he says. "If he messes up a job, then it's my name on there."

10. "You don't even need gas to run your car." Cars run on gasoline — but not all cars need gasoline to run. In fact, 6 million cars on the road today (mostly from U.S. manufacturers and built since 1998) are "flexible fuel" vehicles that can run on E85, a new fuel that is 85% ethanol and only 15% gas. Though E85 is currently available only at 710 stations, it's expected to show up at 2,000 stations by the end of the year, thanks in part to state and federal tax credits.

When Minneapolis resident John Schafer bought a car in late 2001, he chose a Chevy Tahoe because it's a flexible-fuel car. Since then he's filled up almost exclusively with E85. The big difference he's noticed: Cars using E85 get about 15% fewer miles to the gallon. But it's a drawback he's willing to put up with. "I'm committed to the technology," Schafer says. "With E85, it burns cleaner so it won't pollute as much."

While E85 generally costs less than regular gas, there is some concern that it may grow prohibitively expensive this summer, when demand is predicted to outpace supply: This year ethanol will be used not only in E85, but it will also compose 15% of every gallon of gas sold. Supplies of ethanol are likely to grow thin, which could drive up the prices of both normal gasoline and E85. And even die-hard Schafer says he won't buy E85 if it starts to cost more than gasoline.


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