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Batten Down the Hatches As Gas Prices Rise Higher |
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Written by Karyn Hendricks
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Saturday, 02 August 2008 |
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Page 3 of 3
It’s great to be a station owner?
As painful as it is to fill up the tank, some hard-working station owners are making higher profits, right? Wrong again.
“Retailers are earning apparently very, very thin margins right now. I know consumers are frustrated and angry, and hurt by rising prices, but what they may not know is their local gas stations are not helped by rising prices either,” said John H. Seesel, the FTC’s associate general counsel for energy. “Rising oil prices don’t automatically translate into big, fat profits for the gas station at the corner.”
Stations typically charge customers between eight and 12 cents more per gallon at the pump than they pay at the wholesale level. Credit card companies charge stations 2 percent of each purchase. The higher the cost of gas, the higher the fee—one more factor eating into the profit.
Refilling a station now costs more than $45,000 for 12,000 gallons. Stations are closing all across the country
“It’s a bad, bad environment right now for independent gas station owners because the cash-flow requirements are so immense,” said Paul O’Connell, New England Service Station and Auto Repair Association executive director.
It’s a jungle out there. Maybe it is time to bolt our doors until the world gets its act together, or then again, maybe it’ll be just the garage door that gets bolted.
See www.autobodynews.com for additional articles on the impact of gas prices on auto sales, insurance, and driving habits.
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