New Jersey Gasoline Station Triggers Controversy Over Inflated Prices

New-Jersey-gas-station-keeps-price-at-398-despite-179-price-across-the-streetThere is a curious story out of Voorhies, New Jersey that touches on a past subject of how gas stations set their prices. The Lukoil station in the town is charging $3.98 per gallon while other area stations, including one directly across the street, price gas at $1.79. What is interesting is that even Lukoil says that it is trying to strip owner Tony Caprio of his franchise over his gouging of customers.

The station is charging super unleaded at $4.59 a gallon and has been previously criticized as the most expensive gasoline station in the state. Some residents say that they have been fleeced unwittingly, including one who said that his teenager spent $65 on 12 gallons at the station.

When confronted by media, Caprio insisted that he was not in charge of setting prices and said “I don’t make the gas prices, my boss does. You know what? Ask him.” However, the reporter said that Lukoil confirmed that Caprio owns the station and that they are trying to drop him from the franchise.

I have tended to favor an open market approach and to allow competition to handle such aberrant players. So long as he meets the state rules of publicly posting prices, it is up to him and the customers to make such market choices. This is not a situation of gouging in a scarce market like during or after a hurricane. State laws protect against such pricing violations.

It is a curious story since this is a competitive market with an alternative across the street. I have tried to figure out why it would be in Caprio’s interest to set the price so much higher than the competition. Let’s assume that a certain number of people buy gas under the blind assumption that stations are priced with a few pennies of the competitive price. Yet, most people do compare. In order for the gouging to work, you have to make so much money on fleecing the unwitting customers that you offset the loss from not competing on price. That seems unlikely with a competitor across the street. It just seems to defy logic.

What do you think?

Source: UPI

24 thoughts on “New Jersey Gasoline Station Triggers Controversy Over Inflated Prices”

  1. Looking at the sign it should come immediately to mind that he offers auto repairs. Margin on retail gasoline actually isn’t very good. NJ is full serve too, it seems he’s pricing it so as NOT to sell it, or if he does its going to be worth his while to actually get out from under the bays to do the fill up himself.

  2. I have always been told that “you get what you pay for”. So the $4.59 gas must be far better than the $1.79 gas, right?

  3. This small biz owner maybe doesn’t want to have to hire an employee and all of the horse manure requirements that go w/ that. So, he keeps prices high. You realize, gas station owners make very little per gallon. So, this guy makes it worth his while to go pump gas in your car. I’m sure he bills his time as a mechanic for at least $75/hr.

  4. I’m thinking this guy has a good repair biz and finds the gas pumping a nuisance. Here’s something folks not from NJ don’t understand .YOU CANNOT PUMP YOUR OWN GAS IN NJ. Gas must be pumped by trained professional. I call it the high school dropout full employment law.

    Growing up in the northeast, w/ many Italians, I seldom heard biased comments about “Eyetalians” being mob figures. Yes, there were mobbed up Italians, but everyone knew many more Italians who were plumbers, bakers, butchers, doctors, mechanics, attorneys, etc. When I moved to the Midwest, is when I started hearing the snickering, “Oh, you are Eyetalian, you must be Mafia.” It used to piss me off. Now, I just point out the ignorance of such comments and move on.

  5. Tony and the boys have another business going on in the back, if ya know what I mean. No interest in competing with the guy across the road? Of course not. Not when selling gas is just a convenient and seemingly legit cover for something, or somethings, far more lucrative. The ole I’M IN THE PLUMBING SUPPLY BUSINESS cover. Gas a few more cents than the next guy? Sure. It can be justified. Selling gas for more than twice the going rate on a consistent basis? Nope. I’m not worried about the consumer. Not one bit. The consumer has an alternative just feet away. If you want to express a sense of concern or interest it should be directed at what, in fact, is going on outta this place. The consumer will drive miles to save a few pennies on gas. Wrong concern.

  6. DBQ – yes, CA gas prices are killer. It’s awful.

    I am curious why this gas station owner is still in business. Is he in a prime location and the other station requires a U-turn? Is there heavy unwitting tourist traffic? Is it next to a high school with lots of new drivers?

    It’s not that hard to compare prices when the other station is across the street. I can see why Lukoil would want to strip him of the franchise; he’s causing too much negative publicity for the company. There is probably something in his contract that prohibits anything that can tarnish the company’s reputation.

    Here in CA, gas prices are always high, but in some areas they are exorbitant.

    As long as he posts his prices, then the responsibility is on the consumer to find the best deal. A similar situation is when you find the same exact product at two different stores, but one costs far higher than the other. Or when two landscaping companies charge wildly different prices to mow a lawn. He’s not tricking anyone. He’s being quite open about charging more than market price. It’s like he’s saying, “Come here, buy the exact same gas but pay more!”

    I agree that it’s very important to teach new drivers how to shop for gas.

  7. Jeso. I worked as a room cleaning guy in a cathouse in East Saint Louis, Illinois near London House East. This particular cathouse charged more for the give and take because it was also a place where one could buy some heroin. They wanted to keep the volume down and the girls happy. The “girls” were all adults by the way. Very much so. They paid me “in trade” if you know what I mean. Well, I got some cash and a roll in the hay all for a day’s pay.

  8. For Christ sake. It is all very simple. He is trying to keep the customer volume down because he needs to give more time to his meth customers. Jeso!

  9. I once lived near a campground that had a Marathon station where the gas price would change very infrequently even if other gas stations a mile down the road were charging a dollar or more less. When asked why this was, the owner said something along the lines of, “My throughput is low and my tanks only get filled once in a while, so I change the price of my gas based on the price I paid for the gas in my tanks. Why should I loose money just to compete with the guy down the road? Wait until gas prices go up, my prices will be lower.”

  10. We haven’t seen gasoline prices in our little rural area under $3.75 a gallon in YEARS. Diesel is pushing $4 a gallon. Of course there are only two stations within a 50 mile radius and one ‘cardlock’ facility. California taxes and Federal gas taxes are part of the problem, but the reality is, that they charge this because…..they can. It is what it is…in California 😐

    If we drive a bit further, you can get gasoline at the Indian Casino mini mart. No taxes. So we are closer to $3 a gallon there. Still not as inexpensive as when we go to the “big” city nearby (about 90 miles away). Then we are in Bill H price territory.

    Supply and demand.

    As to the guy in the article. It isn’t gouging. People can buy their gas elsewhere and have many other choices.

    This station is always about a dollar higher, but always has cars at the pumps. Who knows why.

    @ Bill

    The reasons we buy at a more expensive station versus another

    1. Convenience. Our time is worth more than it takes to drive around and find a slightly lesser deal.

    2. The station takes our ATM/Credit card in the card reader. We have discovered that some stations don’t want to read our card, while others will. So screw ’em…..we go to the ones that will read our cards.

    3. The cheaper station usually requires cash and is a pain in the rear to go in and ask them for X amount of gas. They ask…how much do you want. “How the EFF do I know, I want to fill up my tank and don’t have prognostication powers.!!!!”

    4. The bathrooms are clean and everyone speaks English.

  11. I agree with Gary T that the guy is not “gouging.” The price is openly posted and cheaper gas is readily available. Gouging occurs when a cheaper alternative is unavailable, such as during emergency situations, taking advantage of need, such as when hotels conspire to raise rates during special event weekends, or when prices are not published, such as in the healthcare industry.

    There is a gas station on Mission Center Road posting regular at $3.75 and another two blocks away posting it at $2.73 today, which is about the going rate most places in San Diego. This station is always about a dollar higher, but always has cars at the pumps. Who knows why.

  12. This mindset is in a lot of New Jersey people.

    “We don’t like that you’re price gouging the gas! WTF, man!”

    “There is a perfectly accessible option across the street. Please use this station if the one you cast your gaze upon has offended your gas price sensibilities.”



    This story gets a half-@ssed ‘meh’.

  13. It’s bizarre. Gas is a consumable so the same people buy continually. If you rip someone off they’re never going to come back (if there are options nearby as stated). I can’t see from the picture but maybe there’s something about the location that results in most of his customers being pass through drivers rather than locals. But it’s hard to see how this works in his favor long-term. Maybe he bumps it up for a while and lowers it when people catch on?

    As for the people who paid more than they could have it seems like a fairly inexpensive lesson on paying attention. I don’t see that they have much to complain about as long as the prices are posted. I also understand the franchiser wants to get rid of him, he’s hurting the brand.

    If you don’t like him stop going to his store.

  14. Because no one is dependent on this station, there being an option across the street, then so be it. I wish I could figure out how to legally stick my hand in other people’s pockets like a lot of businesses; those being primarily utility companies, banks, the telephone companies, and the most disgusting scum of the moment-the guy who charges $750 a pill for a drug some people need, that costs pennies to make, because he can.

    The guy who charges $4 for a gallon of gas and gets it is part of a study of the human condition that is worth the time. The guy who charges $750 a pill for a life giving drug is scum and should be eradicated by the system.

  15. It is not unusual to see the gas stations near the freeway ramps 50 cents higher per gallon. However, Garmin and 5 minutes of driving will find you a cheaper station. Still, if the needle is on empty, this is your station.

    This is a free market economy. He can over-charge if he wants. I am not getting my gas there.

  16. A now long passed great-aunt always subscribed to the concept that “you get what you pay for.” Would drive me nuts at times. If was priced higher and people bought it, then it must have worth.

    In the small city of Port Orchard, WA there was a name brand gas station that served “gourmet gas”…at least that was its sign and they charged $.40 to $.50 more per gallon. Same gas as Safeway’s about 2 miles away. But it was next to a freeway off ramp.

    So what’s the difference between an open station pricing 2-3 times others? Other goods are often so priced…furniture, clothing, others?

    The station may sell less gas, but probably leisurely all the way to the bank….”there’s a sucker…..”

  17. There could be a very reasonable explanation for this mystery–perhaps the seemingly over-inflated gas prices reflect a full-service station–as opposed to a self-service one–where customers receive massages in the backroom? Who says that there are no such things in life as happy endings?

  18. The obvious answer is buy across the street. Nothing more simple. Also train your kid how to buy fuel. If he’s old enough to have a license and $65 in his pocket he’s old enough to read the prices. Anything else is interfering with free trade and the dude is perfectly free to go broke. Unless he’s charging for something else under the cover of gasoline sales. Now that’s a thought. 12 gallons and a dime bag?

  19. Well I say more crazy power to him.

    Here we can see if the free market works or not.
    There is no gouging, just honest overpricing.
    Let people buy from him if they want, nor not if they don’t.

    I don’t even see the controversy.

  20. He’s going for the customer who has a corporate gas card and doesn’t want to wait in line. Huge profits and lower transaction costs make up the difference.

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