Monday, April 28, 2008

Lettering Shortage May Help Thwart $4 Gas

Author: Nick
Category: Money
Topics: ,

comic 18 - gas recipe

San Francisco, CA—Some U.S. cities may be only days away from hitting historic average gas prices. In California, where the average price of a gallon of gas is a country-leading $3.90, consumers are feeling the pinch every time they fill up their tanks. But it’s not a shortage of refined petroleum that has gas station owners in San Francisco worried.

“I’m out of fours,” says Bill Jacobson, owner of Jacobson’s Gas ‘n’ Carry on Route 1 near Golden Gate Park. The signs along the road next to his service station tell the story of just how high gas prices are in the area: $3.97 for regular unleaded, $4.11 for mid-grade, and $4.23 for premium. “Them’s the only fours I got.”

A recent shortage of gas price billboard lettering—those large plastic numbers that gas station attendants are now changing as often as three or four times a week—is about to have a big impact on gas prices nationwide. Due to supply-chain problems and higher shipping and manufacturing costs, makers of the plastic numbers aren’t able to keep up with the recent demand from service stations for certain digits, particularly the number “4″ which may soon be as ubiquitous on gas station signs as “1″ was during the 1990s.

“I don’t know what I’m gonna do,” mulls Jacobson. “I just found out I’ve gotta raise my prices four cents starting with Wednesday’s shipment, but I can’t do that.” He points to a pile of plastic numbers over in the corner of his storage room. There are plenty of most numbers, especially “1″s, but the number “4″ is noticeably missing. Most sign kits like Jacobson’s date back to the 1980s and were only issued with two of each number above three. That’s because sign makers didn’t anticipate prices ever reaching the four-dollar mark—at least not for a century or two.

“We just can’t keep up with the demand,” says Nancy McMann of Industrial Signs, Inc. “We used to sell maybe 1,000 individual fours a year. Now we have back orders for 100,000.” McMann continues by explaining that the complexity of the shape of the number four means that they normally only print gas station fours using a special and expensive sign-making machine two or three days a year. “We’ve got the four machine going twenty-four-seven now, but we just can’t get them out the door fast enough.”

McMann isn’t complaining though; the huge demand for fours has allowed her company to charge much higher prices for the numbers. Whereas the typical individually-sold gas price number goes for $20, Industrial Signs, Inc. has been charging over $700 for each of its fours. And gas station owners are paying up; on eBay, used fours have been selling at auction for as high as $1,500 a pop.

First Gas Theft, Now Gas Price Theft

In some cities, rising fuel costs have prompted a few fed-up consumers to turn fugitive. Nationwide, the rate of gasoline theft has nearly tripled since 2006, but a new type of crime has recently started striking service stations.

“Last week, I had to chase after some punks who were making off with my fours.” Jim Ferguson, owner of several gas stations along Route 101 in San Francisco, recalls his run-in with a group of price sign bandits. “I made the mistake of selling gas at $3.44 a gallon. I realize now I was asking to be a victim.”

Stealing the fours has become somewhat of a rebellious act in underground circles dedicated to fighting high gas prices. Websites like ShowYour4s.com and MovingFourward.com have started popping up in recent weeks, inviting users to showcase pictures of themselves posing with stolen gas station fours.

“I can’t afford to replace the fours if they’re stolen,” says Ferguson, who pursued his sign thieves down Route 101 at 11 o’clock at night. A police report filed by Ferguson says the crooks finally dropped the stolen signs after being chased by Ferguson for nearly 20 minutes. “Insurance will only cover the price I paid for those letters—about $7 each back in 1990.”

Other gas stations along Route 101 haven’t been so lucky. At least a dozen four-sign thefts have been reported in the area since the start of April. Most were taken during the brief period of three dollar forty-something cent gas prices earlier in the month. The surge of sign thefts prompted most gas stations to jump to $3.50 gasoline ahead of price increases solely to keep their fours safe.

LED Sign Sales Skyrocketing

Thanks to the four shortage and the recent rash of sign thefts, sales of LED (light-emitting diode) gas price signs have jumped in the first quarter of 2008.

McMann’s Industrial Signs, Inc. also makes the LED signs. She states that orders for the easy-to-maintain, all-electronic signs are backlogged through 2009. And for many gas station operators who have resisted the change from manual, plastic lettering signs to LED billboards due to the expense of the high-tech signs, the cost of replacement fours may finally push them to make the switch.

Ferguson ordered several of the signs for his stations back in January, but they won’t be installed until at least June due to high demand for the signs and a lack of skilled installers.

“I’ll just have to hold out with the handful of fours I have on hand until then.” Ferguson holds up two of the coveted plastic fours. “Once the new electronic signs are in place, I’ll sell these fours to help pay for them new signs.”

Five Dollar Gas Soon???

Bill Jacobson isn’t as lucky. He can’t afford the LED signs, even after considering the money he could make selling his used sign numbers. He says he may be faced with difficult decisions if his fours are stolen by price vigilantes.

“If my prices are at four and a quarter and someone makes off with the four, I may have to skip right to five dollars.” Jacobson shrugs and adds, “I’ve got plenty of fives.”

Such drastic measures may not be necessary in other cities where gas station operators can replace missing or stolen fours with temporary measures like numbers scrawled on cardboard. Unfortunately for San Franciscan gas vendors, a law dating back to the 1960s designed to prevent “the uglification of our fair city” prohibits adjustable lettering on commercial signs from being replaced with anything other than matching letters. Thus, number thieves trying to fight rising prices may see their efforts backfire as service stations are forced to substitute fives in place of fours.

Ferguson already has a plan for when his fours are, as he puts it, “inevitably stolen in the next few weeks. I’ll raise my prices to five dollars but give away dollar-off coupons on the corner. People will think they’re getting a bargain.”

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