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Big Expansion Foreseen in Unattended Gas Stations

April 16, 1989

Undated (AP) _ Those credit-card slurping electronic creatures that can do your banking and spit out airline tickets at the departure gate are moving onto roadways to fill your tank, and could become the primary auto fueling pits of tomorrow.

″Phantom″ or ″ghost″ stations, as they are sometimes called, are appearing across Texas, Arizona and Minnesota, beckoning motorists with cheaper prices and signs like First Fuel Bank and Auto Fuel Co.

Like self-service stations two decades ago, these computerized, people-free stations have been spreading slowly. But experts predict their use nationwide is inevitable.

″There’s no question about it. It’s going to be a very big part of gas marketing in the future,″ says David Morehead, spokesman for the Petroleum Marketers Association of America, which represents about 10,000 U.S. retailers and wholesalers. ″It’s the next logical step in the process.″

Unattended fueling is nothing new but until recently, fire codes restricted it to private and commercial users.

Arizona fire inspector Burt Wright was a pioneer in pushing for changes that opened unattended fueling to the public two years ago.

A study that led to the revision of national fire codes showed that ″safety records were best at service stations with no attendants and worst at those stations where an attendant did the pumping,″ Wright says.

″At an unattended pump, there is total attention to one thing - pumping gas. You’re not usually distracted by pumping gas into two or three different cars or checking oil or tires,″ he says.

In the 1960s when attended self-service stations were controversial, the fear was consumer carelessness could lead to explosions and fires. But Wright’s study produced no evidence to support that fear.

″It’s the public who’s pumping the gas in the private locations and that’s OK but it’s not OK for them to do it in a public location? That’s absurd,″ he says.

New fire codes set specifications for equipment, including automatic shutoffs in case of accidents, and special alarm systems, including telephones to tap into emergency locations. They require regular inspections, and prominent posting of operating and emergency instructions.

Cynthia Condon, vice president of Pacific Pride Services Inc. of Salem, Ore., which caters to commercial fleets in six western states, believes the time is right for unattended fueling.

″People have come to trust machines over people,″ she says.

Moreover, consumers have come a long way from the days of brand loyalty. Prices now dictate consumer preference and the elimination of people means lower costs and more competitive pricing.

First Fuel Bank Inc. in St. Cloud, Minn., for example, normally prices its gasoline 2 to 5 cents below rivals, founder Jim Feneis says.

Ghost stations operate much like automated bank tellers or computerized airline ticketing machines at airports. Customers insert a plastic credit card, punch in an identification number and pump the gas. At the end of the month, they receive a sophisticated statement, much like a bank statement.

Opposition to unattended fueling has come primarily from service station owners.

″They’re dead set against it basically because it’s going to put several of them out of a job,″ says Jim Egan, fire protection design technician for the City of Tucson, which allows unattended fueling.

Although the business is now dominated by independents, major oil companies are window shopping.

″Arco and Exxon came into town and asked if we would allow it about a year ago and asked for a list of all the closed up stations,″ Wright says.

For now, the independents are enjoying life without the majors.

Auto Fuel Co., based in Abilene, Texas, has 18 stations in Texas and Arizona, and is acquiring abandoned service station sites in the Sun Belt, says Roger Bryant, vice president of operations. Auto Fuel plans to open 600 ghost stations in the next few years.

The biggest boon to marketers may be new federal regulations requiring tougher standards on underground storage tanks and $1 million minimum insurance, even for the smallest tank owners.

″The reality for most of the small operators, is they can’t afford it,″ says Morehead.

A survey last year showed that many owners could afford to upgrade tanks, but more than 27,000 stations will close because of the insurance costs, Morehead says.

Pioneers in unattended retailing say that by the time tank owners spend the money to upgrade their equipment, they will be able to operate as a fully automated system.

Feneis is using the new regulations as a marketing tool to lure commercial fleets, offering to buy and remove existing equipment if the fleet signs up as a First Fuel customer.

Like self-service stations, ghost stations have been slow to catch on. In 1972, self serve represented only 2 percent of the industry; today, it represents 80 percent, industry figures show.

Statistics are scarce on the number of unattended retailers. The American Petroleum Institute, which represents major oil producers and refiners, says the numbers are ″very small″ and that the concept is experimental.

Robert N. Renkes, executive vice president of Petroleum Equipment Institute in Tulsa, Okla., says that while sales are up on card-operated equipment, states will act slowly in tailoring their fire codes to national codes. New Jersey and Oregon don’t even allow attended self-service yet, he says.

For now, the two biggest questions involve profitability and public acceptance.

″The equipment is there. The equipment is safe. Everything is ready. Now the marketer has to figure out if he can make a go of it,″ says Renkes, who believes unattended makes good economic sense, particularly in remote locations.

″As the minimum wage rises and fringe benefits become costlier, it will cost more to have attendant operations,″ he says.

L.W. Locke, owner and president of Eastern Petroleum Corp., in Enfield, N.C., doesn’t believe ghost stations can be profitable catering to the general public alone. Locke won’t sign up any customer using less than $500 of gas a month. Feneis in Minnesota believes if you offer the right price, you’ll get a profitable balance of public and commericial customers.

But will the public accept them? Many convenience store-gasoline station operators say no. They believe people want food along with fuel. But ghost marketers like Feneis believe enough people prefer lower gasoline prices and fast, convenient service 24 hours a day all year round.

Bryant’s Auto Fuel is taking the safe route, placing ghost pumps in strategic areas and cutting expenses by sharing property costs.

″We share the real estate, like a fast food place or a quick lube, but they don’t share our business,″ Bryant says.

He predicts ghost pumps will begin appearing in unconventional places - ″perhaps outside a florist shop or anyplace where there is unused real estate.″

End adv for Sunday, April 16

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