Blumenthal: Gas prices hurting station owners

Patrick "P.J." Sullivan, owner of Sully's Mobil in New London, right, shares a laugh with Senator Richard Blumenthal about how having the senator in front of the station is "good for business" as Sullivan speaks with Senator Blumenthal about the current challenges gas station owners face with the rising cost of gas at the station Wednesday May 2, 2012.
Patrick "P.J." Sullivan, owner of Sully's Mobil in New London, right, shares a laugh with Senator Richard Blumenthal about how having the senator in front of the station is "good for business" as Sullivan speaks with Senator Blumenthal about the current challenges gas station owners face with the rising cost of gas at the station Wednesday May 2, 2012. Tim Cook/The Day

New London — U.S. Sen. Richard Blumenthal appeared Wednesday at Sully's Mobil on the corner of Colman and Vauxhall streets to highlight the difficult times that the state's service stations are facing because of high gas prices.

Meeting with station owner P.J. Sullivan at an informal press briefing, Blumenthal said gas retailers are hurt just as much as — sometimes even more than — consumers when fuel prices skyrocket above the $4 mark.

"The big guys profit," Blumenthal said to Sullivan. "The little guy, like yourself, gets hurt."

Sullivan, whose lowest fuel price was posted at $4.13 a gallon, said motorists begin changing their habits once gasoline rises to the $4 level. They spend less inside his convenience store, where a Dunkin Donuts outlet is located. They cut way back on car washes available at one side of the station, and they don't fill up their tanks.

Sullivan estimates that his business is half what it used to be just five years ago. Adding to his woes are the high fees station owners must pay to credit card companies for the 80 percent of customers who don't pay in cash, he said.

The average 2 percent fee for credit cards takes an even bigger chunk out of station owners' profits as gas prices rise, yet the intense competition for customers doesn't allow for the businesses to raise prices beyond the extra amount they are being charged by distributors, he said.

"You're hit as hard or harder than the consumer" when gas prices go higher, said Blumenthal, who could be seen later pumping his own gas.

"The higher it goes, the worse we are," Sullivan said.

Blumenthal said he is asking the U.S. Department of Justice to investigate gouging among speculators in the oil futures market, which he hopes will lead to Senate hearings on the high price of gas. He also is advocating for the elimination of subsidies for big oil companies and for an end to the practice of exporting oil discovered on federally owned land.

Blumenthal said industry estimates are that 56 cents of the price of a gallon of gas can be attributed to speculation. He would like to see caps on speculative trading in oil, as opposed to trades involving airlines or trucking companies that actually take delivery of fuel products.

"There's no price gouging at this (retail) level," Sullivan assured Blumenthal.

Sullivan, who has run Sully's Mobil for 42 years, said he supports Blumenthal's efforts in Washington but believes more can be done on the state level as well. Reducing gas taxes by 25 cents or so would put service station owners in a more competitive position with businesses across the border in Rhode Island and Massachusetts, he said.

Sullivan said he regularly hears from customers in those state who are paying 25 to 30 cents less for a gallon of gas.

"You're a nice guy, but..." Blumenthal said.

"They don't like me that much," Sullivan laughed.

l.howard@theday.com

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