New York gas station owners are celebrating a new law signed last week by Gov. David Paterson that will allow them to sell cheaper unbranded gasoline, The Times Union in Albany, N.Y., reported.

Owners of stations affiliated with major oil companies such as ExxonMobil, Hess and Sunoco are typically required under contract to buy gas made by those companies, the newspaper reported.

But the new law approved by the governor last week allows gas stations that own their own tanks and pumps to get around those clauses, ultimately providing them with the ability to buy cheaper unbranded gas at a significant discount.

“It’s been a goal of ours for a lot of years," Ralph Bombardiere, executive director of the New York State Association of Service Stations and Repair Shops, told the newspaper.

Independent gas station owners have always been able to buy unbranded gas, one of the reasons they can offer gas for lower prices than those offered by stations that fly big oil banners.

Bombardiere said unbranded gas can sell for as much as 20 cents less per gallon than branded gasoline.

Although not all station owners are expected to start offering unbranded gas right away, the new law could lower prices in the near term by forcing big oil companies to reconsider their prices, since dealers will have choices on where they get their gas.

“At a time when New Yorkers are struggling to cover the basic cost of commuting to work, the governor signed this bill in an effort to lower gas prices for consumers,” said Paterson spokeswoman Erin Duggan. “This legislation is expected to create a more competitive retail environment, which should lead to savings at the gas pump.”

Under the law, station owners would have to clearly post that they are selling unbranded gas along with the price, the newspaper reported, adding that Bombardiere said the law takes effect immediately.

The New York State Petroleum Council, a trade group representing the large oil companies, opposed the bill, saying it would be impossible to verify whether stations were commingling branded gas with unbranded gas. The big oil companies said their gas has additives that make it perform better.

However, there is nothing that the oil companies can do now that the bill has become law, except comply, said Michael Doyle, executive director of the New York State Petroleum Council.

"It’s bad public policy, but it’s the law," Doyle told The Times Union.