A gallon of premium gasoline at a full-service pump in Northwest Washington was going for as much as $2.08 at the Exxon station at 4244 Wisconsin Ave. in a survey of prices at D.C. gas stations during the first week of December.

It isn’t just the higher cost of doing business in the District that drives up costs, said Harry Murphy of the Washington Maryland Delaware Service Station and Auto Repair Association. The association represents most owners of the 112 service stations in the city.

The problem is that the major oil companies actually charge their own dealers higher wholesale prices in more affluent neighborhoods, Murphy said. The practice, known as "zone pricing," hit the industry about five years ago, he said.

Most major oil companies draw their own zone lines and none contacted for this story would reveal exactly where they lie. Most dealers don’t even know where the zone lines are. But when they started talking to each other, Murphy said, they found out some of them were paying higher wholesale prices based on their location. An investigation into the practice was begun during former mayor Sharon Pratt Kelly’s administration but never reached a firm conclusion, Murphy said.

For at least one major company, the zones are east and west of Rock Creek Park. During the week of Dec. 2, the difference in the retail price of a gallon of self-service unleaded was about 25 cents.

Although nearly every local dealer posts prices in hard-to-miss signs along the street, some are reluctant to reveal their prices over the telephone. Employees at the Amoco station at 18th and S streets NW and at the Tenleytown Amoco at 4900 Wisconsin Ave. NW hung up when asked what their prices were. An employee at the Exxon at 1 Florida Ave. NE wouldn’t reveal the station’s prices but said she was certain they were "the lowest in town."

Corporate spokesmen are equally reticent when it comes to talking about their prices. Crawford Bunkley, a spokes-man for Exxon, claimed there were "federal restrictions" that prevent him from talking about Exxon’s wholesale prices.

Felicia Kessel, a spokeswoman for Shell and Texaco, simply said individual retailers set their own prices. She declined to elaborate.

At work behind the price at the pump are dozens of factors, such as competition and taxes.

"There are more service stations in Northeast (Washington) than any other quadrant," Murphy said. "That drives prices down."

But most of all, it’s a question of what the market will bear.

In some areas of Northwest Washington, Advisory Neighborhood Commissions and the D.C. Gasoline Advisory Board have forced gas stations to retain full-service islands to accommodate elderly residents, even though station owners say maintaining full-service costs them too much in insurance and employee benefits.

And those same areas in upper Northwest Washington are where prices are consistently 20 to 30 cents higher than elsewhere in the city.

While the District’s 20-cent gas tax is higher than the 17.5 cent tax charged at northern Virginia pumps and is sometimes cited as one reason for higher gas prices in the city, some suburban Maryland gas stations manage to charge cheaper pump prices despite the state’s add-on gas tax being significantly higher, at 23.5 cents, than the District’s.

The cheapest gasoline in the city seems to be available from independent dealers in working class neighborhoods. At two stations near Fourth Street and Rhode Island Avenue NE, unleaded was recently down to 95 cents a gallon.

Copyright 1998, The Common Denominator