CATTARAUGUS INDIAN RESERVATION, N.Y. (AP) _ The tax-free cigarettes and cheaper gasoline that have drawn penny-wise consumers here for years are looking even better lately.

Dan Palczwski expected to save about $15 Monday during a trip to JR's Smokeshop, where he filled the tank and picked up a carton of cigarettes.

``I had a day off so I decided to go for a ride,'' said Palczwski, who lives about 25 minutes away in West Seneca, just outside Buffalo. ``It's definitely worth it.''

Since March 1, the cost of cigarettes off the reservation has jumped to $4 a pack or more while gasoline has soared a record 12 cents per gallon to an average of $1.59.

On the reservation, where Native American vendors pay no tax on cigarettes and only federal tax on gasoline, cigarettes sell for about $2.29 a pack and gas for $1.29 a gallon.

``I've seen a lot of new faces,'' said Morgan Reid, general manager of JR's. He estimated business is up about 10 percent since the beginning of March.

The cigarette increase comes from the state, which raised the cigarette tax by 55 cents a pack effective March 1 to a highest-in-the-nation $1.11. The high gas prices come amid rising crude oil costs.

Off-reservation convenience store owners say they are already feeling the effects of higher cigarette prices and worry things will only get worse when smokers who stocked up before the tax increase look to replenish their supplies.

``I expect we'll have a clearer idea by the end of March but I wouldn't be surprised to see some stores lose 30 to 50 percent of their cigarette business and potentially more,'' said Jim Calvin, executive director of the New York Association of Convenience Stores, which wants the state to repeal the cigarette tax increase.

So far, fuel sales seem to be holding steady, he said.

Reid, at JR's, said reservation stores have raised the price of cigarettes by about $3 a carton in recent weeks to close the gap between on- and off-reservation stores. But cigarettes are still between $9 and $13 cheaper by the carton on the reservation.

``We're not trying to take all the business from off the reservation,'' he said. ``We've never said we want all the sales, but (the state) keeps pushing the people toward us every time they raise their prices.''