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Retailers Continue Gasoline Price Wars

WESTMINSTER, Md. -- At a time when the average price for regular unleaded gasoline in Maryland is $2.20 per gallon, Royal Farms, Sheetz, Tevco and Wawa stations were selling gasoline at $1.99 per gallon or less this week, according to The Baltimore Sun.

And area competing c-stores are seeing a decline in sales. At Oceanic convenience stores, sales have fallen by half since the low pricing began about a week and a half ago, according to the newspaper.

"Everyone else is suffering," said Oceanic store owner Sam Qaisrani, who lowered his gas by a nickel yesterday to $2.04 a gallon, which is as low as he can go at the moment without losing money. "$1.99 is not even my cost," he said.

According to Jeff Lenard, spokeman for the National Association of Convenience Stores (NACS), "Forty percent of customers will switch where they buy gas for 3 cents a gallon, and everybody will switch for 8 cents."

Baltimore-based Royal Farms told the paper that it was simply trying to get customers to make that switch Wednesday evening when the company dropped its Westminster price to $1.97. Royal Farms was the first to go to $1.99 because one store in the town is only a few months old and had to get a foothold in a tough market. A few other Royal Farm stores in Maryland and Delaware also were offering $1.99.

"We thought it would be a good strategic move to get real aggressive on the fuel price to try to [encourage] people to come in and see what we're all about," said Frank Schilling, director of marketing and merchandising for Royal Farms. "Everybody likes a bargain on fuel, especially nowadays."

North Carolina is another state experiencing gasoline price wars, with The Pantry convenience store chain accusing market newcomer Sheetz and Kroger grocery stores in a lawsuit of illegally undercutting the price of gasoline at pumps that compete for budget-minded motorists, Myrtle Beach, S.C.-based The Sun News reported.

The Pantry, owner of Kangaroo convenience stores in that market, said Sheetz and Kroger consistently sold gas below wholesale cost by as much as 12 cents per gallon between Feb. 21 and March 7. Sheetz, Kroger and two Kangaroo stations owned by The Pantry are within two miles of one another.

The lawsuit filed last month in Wake County Superior Court is based on a North Carolina law prohibiting retailers from selling gas at prices below their wholesale cost.

Altoona, Pa.-based Sheetz has not broken Noth Carolina law, spokesman Michael Cortez told The Sun News.

The law requires retailers to charge at least the wholesale price for gasoline but for two exceptions: during a 10-day grand-opening window, and if they are dropping their price to match a competitor's. The 1986 law originally was passed to keep big oil companies from charging outside buyers more than its own gas stations.
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