A new bill could alter how gas stations display prices to drivers, possibly ending the lure to low cash prices per gallon.
The new regulations are being sponsored by Senator Kagan and were introduced for the first time in this legislative session on January 20, 2023.
According to the Gas Price Gouging Act, or Senate Bill 178, the act would require retail service stations to display a sign that clearly and visibly states the credit, debit, and cash prices for regular gasoline.
"I think every Marylander has had the experience of driving into a gas station to fill their tank as the prices keep going up and up and finding out that the price that they saw on the signs as they were driving down the road are not the prices that they end up paying," Senator Kagan said.
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Under Maryland law, gas station owners are required to post the lowest price for a regular gallon of gas. Kagan says the problem with this is the lowest price is often cash.
She said data she's received points to at least 78% of drivers using credit or debit cards. With most consumers unable to afford cash payments, many are left relying on varying forms of payment.
"Gas station owners are doing a bait and switch," Senator Kagan explained. "They're publicizing one price but charging a price that's significantly higher. It's a rip-off, and it needs to change."
Some gas stations, Kagan says, have a 25-cent per gallon surcharge for using a credit or debit card. Retailers like Royal Farms, Wawa, and Shell often offer car washes or loyalty programs as additional savings at the pump but over a period of time, the surcharge begins to add up.
"You're not going to stay in business by tricking customers," said Jeff Lenard, spokesperson for the National Association of Convenience Stores.
Lenard said that most states have regulations that require cash and credit prices to be displayed and that the highest price be most prominent.
"Credit card fees are the number one issue in our industry," said Lenard. Lenard said that the credit card fee is about 2.5%, adding 8 to 9 cents per gallon.
"The reality is that gasoline isn't one of those things that I can choose not to buy when the price gets high. If I'm going to drive my car it needs to have gasoline in it, until such time as I can afford an electric vehicle. So the question is whether I'm going to leave the gas station feeling ripped off or feeling like I had the right information," Kagan explained.
Lenard said that the profit margin on gasoline is low - only about 10 cents per gallon and that gas stations make more money by convincing customers to go into the store for other purchases. About half of the people that buy gas go into the store to buy other products, according to Lenard.
Kagan has brought the bill to her legislative colleagues in the past but this year, she hopes higher gas prices, unhappy constituents, and new legislators will be the push the bill needs.
She encourages Marylanders to document prices and contact their legislators, urging support for Senate Bill 178.
The next hearing is scheduled for February 9 at 1 p.m.
If passed, the pilot guideline would begin October 1, 2023, according to the Maryland General Assembly.