A website (below) that I use from time to time lists the gasoline prices at the stations around here. Actually, you can set it to any zip code. One Shell station in the area is often 35 cents or more per gallon MORE than the surrounding stations. The guy also does some automotive repair, but it would seem that by the pricing they use, they miss a lot more business than they get at those prices. There are stations within a mile or so that are considerably cheaper. Something seems fishy, but I can’t figure it out. Why would one station continually be so out of line in gas prices? Can’t a station make a lot of money selling gas? Don’t they miss out on a lot of business by NOT selling gas? I understand that they don’t need to sell as much gas at those prices to make up for selling MORE gasoline, and I know there’s a break even point. I’ve just never seen one station consistently price itself out of a market. What do you suppose I’m missing here? thanks. xo, C.
My experience from 10 years ago - I made from 2 to 10 cents per gallon (it varies day by day) on regular unleaded.
The guy selling at 35 cents higher than everyone else might (I’ve no idea where you are so I’m just guessing) be a full-serve station.
No, there’s not a lot of money selling gasoline. I left the business when pay at the pump started getting popular as most of my profit was in-store sales and few people buy snacks if they don’t have to come in.
Nope - that’s the self-service price. He also doesn’t sell snacks or anything else with a large markup. And, in fact, he once sold me a set of tires at just about cost, ostensibly to undercut a competitor on the other side of town. Something fishy there, I’m thinking.
It may be because their rent is higher, and their rent is higher because they have a more desirable spot, and because they have a more desirable spot people are willing to pay extra.
Also there are ‘zone’ prices set by Big Oil, your wholesale price is set by Big Oil for your area and there is nothing you can do about that except move.
The guy who fixes my car claims that he often makes little on gas, especially when the price is falling and he has a large tankful of more expensive gas. It is clear that his real profit is in repairs. But that is getting harder and harder as more people use dealers since they have the computer equipment and expertise. It is less of an issue with my 17 year old Honda.
Usually in L.A. I will see a Chevron with gas at a certain price ($2.63/gal at the moment), and an AM/PM right across the street with gas at $0.10 less than that.
The problem is that the AM/PM’s I have been to don’t take credit cards at the pump, and so I go to the Chevron. They also have a lot more snack foods available inside their stores. So that seems to add up quite sensibly.
Isn’t there a law that set a minimum profit per gallon (was it 8 cents?)? This was supposed to protect private owners from large corps who could flush them out the market.
Don’t quote me on this, but I believe the law is that you can’t sell gas at a loss in order to drive out competition.
Not sure this is a federal thing and I don’t recall it in the Sherman anti-trust stuff.
Most gas stations in Greece go for 5 to 10 eurocents per liter (about 20 to 40 eurocents per gallon). This might sound like a huge profit margin, but we pay a shitload of taxes and besides all gas stations here are full service which increases costs.
The oil company profits range around 0.8 for generic brands to 2 eurocents per liter for high end brands like BP or Shell.
There is very little money to be made from selling gas here, as margins are low and customers have no brand loyalty, going miles out of their way to save a few pennies. They must make their profit on food, soda, newspapers, beer etc. inside the ‘shop’ (very few places here have pay at the pump; I can only think of one that is completely automated with no personnel at all). In many cases it has become the substitute for the old village store that went out of business, broken by the big supermarket chains.
Gas prices on major highways are invariably much higher, I’d guess their ground rent is high plus the convenience factor persuades many drivers to pay up - if they claim it on expenses they won’t care anyway
I know in Maryland that a station cannot sell gas for less than the state government can officially buy it for through their supply contractor. So, even if a station can buy it at $2.109 and sell it for $2.199, if the state pays $2.229, the station must charge at least $2.229.
Some states have laws on this. They were talking about it in Colorado a couple weeks ago; there are supermarket chains that wish to undercut the market with discount pricing and are prevented from doing that by a Colorado law. As I recall, there was a list of something like 10 or 15 states that have the same sort of law in place. Anywhere else, you can charge what you like, subject to federal anti-trust laws and regulations, of course.
Here in Ohio, it’s always a good idea to see what the supermarkets are charging; often its a dime or more less than anywhere else, though usually the gas stations nearby have to drop prices to match or lose almost all business.