Gasoline retailers, lawmakers call for end to ‘zone pricing’

If running low on gas, it could be more economical to fill up the tank in East Meadow before driving to other areas in Nassau.

Some gasoline retailers blame the disparity in gas prices from town-to-town
on a practice known as zone pricing.

Peter Holmstedt, owner of Tech Mobil Auto Repair on Merrick Avenue in East Meadow, joined two Nassau legislators at his station on Oct. 1 to urge state lawmakers to pass a bill that would amend current legislation against this selective form of pricing.

A bill passed in 2008 banned zone pricing, but exempted the suppliers — including big oil companies like Shell and Exxon Mobil.

Speaking on behalf of Holmstedt and the Long Island Gasoline Retailers Association, the organization’s president Kathy Odessa called the practice a “discriminatory pricing policy.”

“Retailers have long fought to have the practice of zone pricing banned as it promotes discriminatory gasoline pricing practices and raises the cost of gasoline to consumers,” Odessa said. “In light of the current economy, consumers can’t afford to pay more and small businesses need to operate in a marketplace which enables healthy competition.”

For example, an individual who owns two gas stations — one in Hicksville and the other in Jericho — the prices will likely be different even under the same supplier, Odessa explained.

The two legislators who met at Holmstedt’s station last week were Kevan Abrahams (D-Hempstead) and Judy Jacobs (D-Woodbury), who are both running for re-election in November. They alerted consumers in a press release that big oil companies tend to “artificially inflate the price” if they think the neighborhood “has deep pockets.”

“Zone pricing manipulates the market and is unfair to consumers,” said Abrahams. “State lawmakers need to amend the language of the law so that the statute can be more effective in its operation and
enforcement.”


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