May 14, 2008

Fuel prices too high for some U.S. pumps to register


While the United States has some of the lowest fuel prices in the industrialized world, the rapid advance toward $4 per gallon is outstripping the ability of some older hardware to keep up. As many as 17,000 mechanical dial-based fuel pumps are still in use in America, and none can register a price higher than $3.99 per gallon.

The problem is almost exclusively confined to rural areas where older stations have simply kept using their original equipment. The stations’ small sales volume and low profit margins mean upgrading or replacing the pumps with newer models that can handle the higher prices is nearly impossible. New pumps cost between $10,000 and $15,000 each, while upgrades cost as much as $650 per pump.

A temporary solution, called ‘half pricing’, is legal in some states. The process involves posting the price of half a gallon of fuel, and then doubling the total shown on the pump after fill-up.

Up to 8,500 stations, of the 170,000 in the U.S., could be equipped with the old-fashioned fuel pumps. Besides their per-gallon price limitation, most are also incapable of registering a total sale larger than $99.99 - meaning owners of larger vehicles can’t fill their tanks in one go, reports the AP.

For those stations that can afford the upgrade, the wait may be a long one - the sudden demand for the modern pumps bas placed an unusual load on the manufacturers of the equipment, leading to a backlog of several months.

This isn’t the first time the problem has arisen, however. In 2005, the jump past $3 per gallon led many stations to upgrade or replace their pumps with meters capable of $3.999. Unfortunately, the upgrade was rather short-sighted, and now many of those owners are facing the same situation all over again.

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