October 1, 2005
By WILL RODGERS wjrodgers@tampatrib.com
Tampa Tribune
TAMPA - Rising gasoline prices are forcing some station owners across the Tampa Bay area to end credit card sales, cutting off an option for consumers growing short on cash to buy the fuel they need.
Retail dealers say they are losing money on every gallon of gasoline as more motorists turn to credit cards to purchase it.
Across the Bay area Friday, the price of self-serve, regular unleaded gasoline jumped as much as 30 cents a gallon from the day before, hitting $3 or more at many stations. Meanwhile, credit card use for gasoline purchases rose to nearly 80 percent Friday, up about 26 percent since last year, said Pat Moricca, president of the Gasoline Retailers Association of Florida.
With so many consumers using credit cards to buy gasoline, station owners, who make a flat 6 cents per gallon sold, are losing at least 3 cents a gallon with gasoline at $3 or higher, Moricca said.
That is because financial institutions charge retailers 3 percent per gallon on gasoline credit card purchases, he said.
Mike Edmundson, owner of the St. Cloud Citgo at 3802 Durant Road in Valrico, has posted signs at his station, advising customers they must pay cash or use a Citgo credit card, which does not carry the banking fee.
"I can't afford to lose 3 cents a gallon," Edmundson said. "Our margins are going bye-bye."
Edmundson said he will give a 3-cent per gallon discount to people who use the Citgo card, at least earning him 3 cents a gallon.
Bay area motorists can expect retail gasoline prices to continue to rise into next week, despite falling wholesale gas prices, said Mike Burdette, a senior analyst with the U.S. Energy Information Administration.
Increases in retail gasoline prices typically lag wholesale prices, he said. So prices at the pump have some ground to make up.
Wholesale prices spiked by midweek and likely are headed downward, Burdette said.
"Unfortunately, we're having to get used to higher and higher levels," Burdette said. "I don't think we're going to stay at these hurricane-related peaks. It likely will be under $3, but it won't be under $2."
Fuel prices are up because 12 refineries along the Gulf Coast have not returned to service after hurricanes Katrina and Rita, Burdette said. That's about 2.6 million barrels a day of refining capacity, or about 15 percent of the nation's refining ability, he said.
Damage to oil production facilities in the Gulf of Mexico are more extensive than first thought, but oil inventories are higher this month than last month.
The refining capability, however, just isn't there, Burdette said.
Although the big oil companies closed more than 100 refineries in the past 25 years, larger, more efficient plants are producing almost as much fuel and other products as in 1981.
Those refineries are turning out 18 million barrels per day this year, less than 2 million barrels shy of the 1981 levels, according to data from the Energy Information Administration.
Florida is a lot better off than other Southeastern and Atlantic Coast states. Consumers from Alabama to Maryland receive gasoline from two pipelines that run from the oil region to the East Coast.
But Florida gets its products from tankers that crisscross the Gulf and other ships from Venezuela, St. Croix and Europe, Burdette said.
Still, David R. Mica, executive director of the Florida Petroleum Council, said motorists should conserve as much as possible.
The gasoline supply will be tight for some time.
"There's no doubt we're in a critical stage," he said. "The good news is the storm is over and we're repairing. But in the shorter term, you just don't have the supply."
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