Tax makes state gas prices rise Some border dealers struggle to compete.

May 20, 1992|By Ted Shelsby | Ted Shelsby,Staff Writer

While gasoline prices have fallen nationwide since last Memorial Day, Maryland motorists will find themselves paying more for a fill-up as they take to the road this holiday weekend.

Thanks to the new nickel-a-gallon boost that raised the state's gasoline tax to 23 1/2 cents a gallon, Marylanders are facing some of the highest prices in the mid-Atlantic region, and gas dealers along the state's borders are finding it difficult to compete.

"I would say 20 percent of the dealers [along Maryland's borders] are in trouble," said Melvin Sherbert, the owner of two Prince George's County stations near Washington and president of the Greater Washington/Maryland Service Station and Automotive Repair Association.

A survey released yesterday by the American Automobile Association found that the average price for self-serve regular unleaded gasoline nationwide is $1.139 a gallon, 2.2 cents a gallon less than a year ago.

But prices in Maryland are slightly higher than they were a year ago, according to a survey by Maryland Division AAA Mid-Atlantic, a local affiliate of the national travel association.

The cost of self-serve regular unleaded, which accounts for about 50 percent of all sales in the state, was $1.128 a gallon Friday, compared with $1.059 a gallon in April and $1.117 a year ago, the Maryland AAA survey found.

The price of self-serve mid-grade was 2.5 cents higher than it was a year ago and 6 cents higher than in April. Premium gasoline at the self-serve island was about 1.5 cents higher than in 1991 and 7 cents higher than in April.

The two surveys show that Marylanders are paying an average of 4.7 cents to 8 cents a gallon more for the best-selling gasoline than are motorists in Delaware, Pennsylvania, Virginia or Washington.

Eight cents might not seem like a business-buster, but it might determine who survives and who fails, said Mr. Sherbert, who owns Amoco stations in Suitland and Silver Hill.

Since the gasoline tax increase took effect May 1, he said, his volume is off about 15 percent compared with the same period last year. That translates into a decline of about 20,000 gallons a month.

Mr. Sherbert said his stations probably do better than others near Maryland's borders. "I have a buffer zone between me and the border. There are stations between mine and the border," he said. Mr. Sherbert said he's heard gas sales at stations closer to the border "are probably off 20 percent or more."

"In this industry, there's a saying: 'You get bigger or you get going,' " Mr. Sherbert said.

It was his way of saying that station owners, who could make a comfortable living in the early 1970s pumping 40,000 gallons a month and doing auto repair work, need to sell 150,000 gallons to maintain the same standard of living today.

"People that were doing great are now doing well today," he said. "People that were doing well are satisfactory. Those that were satisfactory are now marginal. And the marginal -- I don't see how they are going to survive. They could be on their way out the door."

James Jackson operates Fort DuPont Amoco on Alabama Avenue in Washington. He said he has been on both sides of the fence and remembers how tough it was in the early 1980s, when the tables were turned and Washington had the higher gasoline tax.

"Some dealers went out of business," he said. Mr. Jackson said he charges about 3 cents a gallon less than nearby Maryland dealers and that his volume is up 5 percent to 10 percent.

Mr. Jackson recognizes that he has a competitive advantage and could boost his volume substantially by trimming his profit margin. "But I'm not out to kill the other dealers," he said. "I can't pump all of the gas."

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