The familiar self-service gasoline pump, which has saved hard-pressed American motorists billions of dollars over the last several years, is disappearing from service stations nationwide.
"Split-island" stations -- offering a choice of lower-priced self-service or higher priced attendant-pumped gasoline -- accounted for 41 percent of the country's metropolitan outlets last December, but only 26 percent today.
During August alone, according to one nationally known gasoline authority, the reduction in self-service pumps forced drivers used to pumping their own gasoline to pay $135 million more to the oil companies.
According to the authoritative Lundberg Letter, "In less than six months split island stations have gone from the most prevalent configuration to being the least prevalent."
And, despite a slight increase in the number of self-service-only stations over the last year, the gasoline sold from self-serve pumps has dropped from 67 percent of all gasoline sold to 55 percent since the first of the year.
Douglas Robinson of the Energy Department's Economic Regulatory Administration attributes the development to the spring gasoline shortage. "When the shortage came along dealers realized they didn't have to discount," he says. "Self-service was a marketing phenomenon."
A recent issue of the Lundberg Letter analyzing the trend in split-island stations says, "The supply situation and federal regulations make self-service price discounts economically unattractive and full-service price premiums (above margins of 15.4 cents a gallon) illegal."
As of Aug. 1, DOE regulations allowed most gasoline dealers to raise their price margins to 15.4 cents a gallon more than they pay.
Publisher Dan Lundberg said in a phone interview that the DOE regulations created "a straitjacket on the gas market" forcing more and more dealers" to just take down the self-service sign." In the past, Lundberg said, some dealers were willing to provide the choice of service, hoping to even out their profits from total sales by charging more for full service to make up for discounts offered on self-service.
A Continental Oil Co. vice president, Samuel Schwartz, offers another view of the trend. "As you get into more and more government regulations in recent years, it has blunted the edge of competitive wrinkles station operators found useful," Schwartz said. Conoco, he added, has continued to maintain a large number of self-service outlets.
Industry-wide, Schwartz says, many of the larger marketers find it more profitable now to maintain maximum allowable profit margins in the sill tight supply environment, rather than lower their profit margins in exchange for increased sales volume.
Petroleum industry officials say the disappearance of split islands has taken place largely at stations owned by major oil companies and rented by dealers. They also say that stations in the South, Southwest and California have been slower to convert to full service that those elsewhere.
Jack Blum, a Washington attorney representing independent gasoline marketers, noted also that "many dealers during the gasoline crisis tended to convert their self-service islands to full service because it was the only way they could control their lines."
Since the first of the year the number of full service stations has risen dramatically from 32 to 45 percent of the nation's retail gasoline network.
At Standard Oil Co. of Indiana, chief economist Ted Eck says, "The dealers have never been super enthusiastic about split island operations. It was really just an interim step dealers employed to increase their volume."
Dealer enthusiasm, according to Bob Cavin, executive director of the Society of Independent Gasoline Marketers, came down to one point -- profits. Cavin says, "Self-service is disappearing because they can realize additional profit margins. The differential between self-serve and full service run 2 to 3 cents a gallon.
As for the impact on prices, Gavin says, "It's going to mean a definite increase for the consumer." He says dealers who switch back to full service will still not be making sufficient profits.
In addition to the trend toward fewer split-island stations, Lundberg Letter analyst Lynn L. Beavers say the differential between full service and self-service pump prices has been dropping, from 3 cents or more a gallon to 1 1/2 cents.