Gasoline Dealers Absorbing Part of Nickel Tax : Retailing: A report says pump prices rose only 2.1 cents in the past week. Sellers fear that they may lose volume if the tax is passed on to customers.

Gasoline pump prices nationally rose only 2.1 cents a gallon last week, the American Automobile Assn. reported Tuesday, suggesting that service stations and refiners swallowed at least part of the 5-cent-a-gallon federal gas tax hike that took effect Saturday.

The modest price hike confirmed expectations that service stations would hesitate to pass on the entire tax increase to consumers who have already cut their gasoline buying in the face of high prices resulting from the Persian Gulf crisis.

“I had no choice,” said Sherman Oaks Shell dealer Jerry Kaplan, who raised his pump prices only 2 to 3 cents a gallon over the weekend. “It was either eat the difference or lose my (sales) volume.”

The automobile association reported that the national average retail price of self-serve regular unleaded gasoline, the most popular grade, increased 2.1 cents to $1.387 a gallon in the past week.

“It was the shortest-lived 5-cent increase in the history of the markets,” said Scott Jones, an industry analyst and president of AUS Consultants in Philadelphia.

There were signs that refiners absorbed some of the tax by lowering wholesale prices of gasoline sold to dealers and other gasoline marketers, in part to give the marketers a break, analysts said.

The widely read Lundberg Survey reported Monday that wholesale gasoline prices for all major grades of gasoline have fallen in all parts of the country since Friday, between 0.6 and 3.5 cents a gallon on average, depending on how the product is obtained by retailers--the so-called class of trade. Price declines also varied by region.

“This was a strong slide, considering that all three classes of trade are sliding, and that it’s for all four of the existing gasoline grades,” said Trilby Lundberg, publisher of the survey.

Indeed, some major oil companies said they have been lowering wholesale gasoline prices since the beginning of November.

A Shell Oil Co. spokesman said the company has dropped such prices 2 to 5 cents a gallon since then; an Exxon spokesman similarly said prices had fallen by about 5 cents a gallon since the end of October.

The automobile association said Tuesday’s retail price was 31.2 cents higher than the price on Aug. 1, the day before Iraq invaded Kuwait.

Tuesday’s price was also a hair lower than the all-time record of $1.388 a gallon reached just before the 1981 Easter holiday, at the beginning of the Iran-Iraq war, the association said.

Although the association did not break out regional variations, it said retail gasoline prices were up in all parts of the country.

In the Northeast “the initial reaction of retailers was to put up the price a nickel, but that has already quickly eroded from 1 to 3 cents a gallon,” Jones said.

He attributed the erosion to strong competition among retailers, excess supplies of gasoline and consumption levels that have fallen faster than seasonally expected, because of the incipient recession.

On Tuesday, the American Petroleum Institute reported that national stocks of motor gasoline rose 1.3% in the week ended Friday to 221 million barrels, while stocks of crude oil, heating oil and residual fuel oil all fell.

Without the new federal excise tax on gasoline, retail gasoline prices would have continued their recent fall, following the decline in crude oil and wholesale gasoline prices, the association reported.

Wholesale, spot and futures fuel prices fell 2 to 11 cents a gallon in one week, the association added.

On the futures markets, the price of crude oil for near-month delivery has fallen from its record peak of $41.15 a barrel reached in October.

Crude oil for January delivery closed up $1.51 at $30.66 a barrel in trading Tuesday on the New York Mercantile Exchange.

Retail gasoline prices should again decline this month, Jones said. He foresaw prices falling by a nickel a gallon by the first of the year.

Said one Chevron dealer: “Regardless of what happens, if you don’t stay competitive on the street, you don’t stay in business.”

‘Eating’ The Tax Hike Self-serve, regular unleaded, average price per gallon nationwide Gasoline Prices Aug. 2: Kuwait invasion Dec. 4: $1.387 Source: American Automobile Assn.