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Posted: Wednesday, 28 May 2008 12:28PM

Wholesale ''Zone Pricing'' for Fuel Gets Trenton Scrutiny

 

by KYW's David Madden

Ever wonder why gasoline prices vary so widely across our region? It’s more than just the rising price of crude oil.
 
The oil companies engage in what’s called “zone pricing,” and it’s a practice that New Jersey lawmakers may soon make illegal.

It happens like this. You notice one price for a brand of gas, then go down the road as little as a mile and the same brand costs more.
  
“Zone pricing” is done across America, according to John Maxwell with the New Jersey Petroleum Council, which represents the oil companies:

"It’s a way to evenly distribute the sale of motor fuel to the consumers, and it provides a mechanism whereby consumers can shop around and save a lot of money."
 
But that comes at the expense of gas station owners in certain locations, according to Sal Risalvato, who heads the New Jersey Gasoline Convenience Store Automotive Association. He blames big oil:

"They would charge more for the product in one location than they would in an other."

He suggests that Exxon may be the biggest zone pricer in the state:

"We think they have over 300 price zones where they actually carve out little areas where they believe they can get an extra five or ten cents."

A bill in Trenton would outlaw zone pricing. The retail group is in favor of the legislation; the Petroleum Council isn’t.

 


 
 
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