Lukoil raises gas prices to more than $9 per gallon
In an attempt to send a message to their corporate office, about 50 Lukoil gas stations in New Jersey and Pennsylvania raised their prices yesterday to more than $9 per gallon during a one-day protest.
Girish Patel, owner of the Piscataway Lukoil station on Old New Brunswick Road, said he is tired of corporate offices forcing stations to pay extra costs because of where his station is located — a practice called zone pricing.
Owners are hoping to end this practice by raising gas prices to more than $9 to deter customers in an effort organized by the New Jersey Gasoline Convenience Store and Automotive Association.
“The prices of my gas is high because my costs are high. Compared to other stations, their selling price is my cost price,” Patel said.
At the pumps, Harman Singh, an attendant for Lukoil, handed out flyers and explained to customers why the price is so high.
“We are getting mixed feedback. Some people are like, ‘Yeah, you guys are doing a good thing, and we will have cheaper prices.’ And others said, ‘This is outrageous. You guys are crazy.’” Singh said. “One guy actually got so mad, he threatened to sue us, saying it was theft.”
The franchises are fighting the high costs of gasoline the distributors set. Lukoil gas stations, on average, are roughly 15 to 20 cents higher than their competitors Patel said. The higher cost at the pumps has led to a decline in business, he said.
“My cost is higher and my volume has dropped by over 50 percent. Every year, it’s going down and down,” he said. “I had three stations before, and because of high prices I had to give the key back on one of them.”
Patel now owns two Lukoil stations, one in Piscataway and another in Guttenberg, N.J. The third Manville location is still operational, but he no longer owns it.
“I think Lukoil is looking to collect all the keys so they can do whatever they want to do with these stations,” he said.
Commuters also felt the effect of the increased prices at the station yesterday. Patel said he had just three sales yesterday morning, totaling $60 in revenue.
There was a $30 purchase, a $20 purchase and a $9.14 purchase, Patel said.
“One guy came in and got one gallon of gas because he was on empty. He said it would be enough just to get him to the next station to be able to fill up,” Singh said.
Reactions at the pumps were mostly negative when drivers saw the prices.
“This is wild. I thought the station was closed until I pulled up,” said Dana Gobbo, one customer. “This really sucks. I’m at a loss for words.”
University students also had mixed reactions to the high prices at the pumps.
“It’s an interesting way to rebel against the system,” said Sarah Stern, a School of Arts and Sciences sophomore. “Hopefully it will work because no one will pay those kinds of prices, especially college students. Ten dollars can buy dinner for a person.”
Marylou Fernandes, a School of Environmental and Biological Sciences sophomore, who commutes to the University, said she was optimistic about the outcome of the price hike.
“It’s shocking, but it’s for a good cause. If the prices do get lowered, they will get more business that way,” she said. “I have never gone to Lukoil because of their higher prices.”
The Lukoil on the corner of Stelton and Hadley roads in South Plainfield charged $8.99 for regular unleaded cash, while the Sunoco station across the street charged $3.79 for one gallon of gas.
“Costs are too high for me to take on alone. When someone uses a charge card, it costs me 8 cents to process it, plus I pay 2 percent for tax,” Patel said.
Attendants handed out flyers at each station that read, “Stations selling the same brand [of gasoline] only a few miles from each other often pay as much as 25 cents more per gallon. Lukoil refuses to play fairly, so you and other customers can buy gasoline at a lower price and enable me to make a fair profit.”
News 12 New Jersey reported that Lukoil’s corporate headquarters considers zone pricing to be fair.
“[Zone pricing is] a commercially reasonable practice used by gasoline marketers for many years, which is fully compliant with New Jersey statutes governing the sale of motor fuel,” according to a statement from Lukoil North America.