I recently read an article about gas theft. Criminal gangs will install large tanks in trucks and SUVs. They will then go around to various gas stations and put gas into that tank using stolen credit cards. When it is full they sell the gas to another gas station. The station buying the gas definitely knows that they are buying stolen gas as it is not delivered in a normal delivery truck and gas is paid for in cash.
Possible.
Yeah, you gotta get money dry cleaned.
Maybe the station owner is doing something with his labor costs? Hiring illegals maybe? Just a thought.
I think we can all agree that this station is doing something illegal, or at least unethical.
Well, I, for one don’t. It’s entirely plausible that his business works for him and meets his needs just fine.
This old thread was kind of hard to find, but this one reminded me of it.
OK, it cant be a ML front. That’s not how ML works. See, you would have a paper trail of every gallon bought and for how much, making the CoGS super easy to figure out.
What you need in a ML front is a business that’s expected to have a LOT of cash deposits normally, and where the mark up i huge and variable (like restaurants). You then deposit a lot of cash that wasnt earned by selling food.
So, this Gas Station would work *just the opposite *of a ML front.
On WalMart gas stations.
for a while WalMart had this policy of putting in a new gas station with prices that undersold everyone around them. They did this with the hope of driving them out of business so they then can raise the cost back up.
Well one time about 20 years ago in Topeka they tried this, selling gas even lower than wholesale price. So a competing station drove up with their own gas truck and started filling up. WalMart tried to stop him but got in a legal bind so they ended up dropping the practice.
I personally know the owner of an independent gas station around here (Wisconsin) and he told me his markup on gas is $0.35/gallon, and he is usually cheaper by a penny or two than other larger chains.
Since he has no mini-mart, after installing the pumps and what not, I bet the operating overhead is extremely small.
However when a pump needs replacing, that’s a huge chunk of change (so I’ve heard) he may be in for a catastrophe at some point.
See Post #20.
The OP hasn’t been back to tell us where this is happening. With GasBuddy, it would be easy to take a quick look. I find it extremely hard to believe that any gas station owner would consistently sell fuel for more than a few cents less than the prevailing price. It is possible to sell for more consistently, if a station is located first off a highway interchange, or near a rental car return depot, or the like. But in all of the above posts, there is no logical reason to sell too low other than in a price war to gain market share, or as a bennie for club members (Sam’s Club, Costco, etc.). Even Sam’s and Costco aren’t usually more than a dime under the prevailing price.
There is no product with more transparent pricing - to the tenth of a cent, in fact - than gasoline. In my area, nearly all stations are within 3 cents of each other on a daily basis, with Sam’s Club usually anywhere from 5 to 10 cents under the norm.
Would the OP be so kind as to mention the station and location?
Decades ago I knew a small independent station that was withing a few hundred feet of 3 stations from 3 national chains (with another a bit further away) and they always had the cheapest gas.
They explained it thusly:
Each of those stations has to buy most or all of their gas from that national chain.
A gas truck holds about 9000 gallons, in a handful of compartments. (the smallest is usually 1000 gal in my experience)
Stations rarely can take the entire load of a truck, and often topping off their tanks would leave a truck with a compartment only partially empty.
Gas sloshing in the tank makes static electricity, and is otherwise something undesirable, so the driver will usually sell the last few hundred gallons in a compartment at a discount.
Because they were independent, they could buy the dregs from deliveries to any of their competitors. And because they paid less, they charged less.
(In fact, the owners of that independent station also owned the Texaco across the street.)
Maybe that same thing is happening at the loading point? Because they are able to buy gas from anybody, including from refineries that aren’t associated with the national brands, they buy cheaper and thus can sell cheaper.
I’d need to have a lot more information to make a better guess than that. For example, along the New York State Barge Canal, many stations (even if miles from the canal) can be filled by pipes direct from the canal. These stations are much cheaper than those that need to have the gas loaded onto trucks to be brought to them.
And my grandfather lived near a “hill” that represented a 800 foot elevation change. Everybody in the area knew that gas was cheaper in the valley than up the hill, because the gas trucks burned a lot of fuel climbing that hill.
So, location can be a big deal.
I thought of that, but …
It is really hard to launder money through a business with metered inventory.
I mean, if I am running a bar, I put down on paper that when somebody orders whiskey I’ll give them 4 ounces. But when somebody orders whiskey, I actually give them 6 ounces.
People flock to my bar because the drinks are good value.
Then I ring up 50% more whiskeys than I actually sold. I pay for them with money from my criminal operations.
When the state auditors show up, the amount of whiskey I bought matches the amount I say I sold, so everything looks legit. my criminal gains have been laundered.
I have known several businesses that offered very good product at reasonable prices, and folks figured it was laundering money for a criminal. I mean, it is easy to lie about how many bananas you put in each milkshake.
But how to you lie about how much gas you are selling?
IF something criminal is going on, more likely it is that the place is also dealing drugs, and the cheap gas price keeps a steady flow of people through the place so it isn’t suspicious when stoners walk up to the booth.
And that is not a particularly good plan for hiding a drug dealing business. The traffic is as much a problem as it is an asset, and if the business is losing money eventually authorities will begin to wonder how it stays open.
A lot of gas stations these days are run by people who have nothing to do with the gas.
As in: another company owns the gas, and the pumps, and sets the prices. The store owner pays the employees who change the paper towels and keep fluid in the buckets for the squeegees, and collects the money for gas sold. For this he is paid a (tiny) fee.
2 cents per gallon is pretty common. The store I’m at (I’m told) makes 1.
Fun exercise: think back to the last time you had to pay for gas with a handful of change (perhaps it was the day before payday). Given that a minimum-wage worker makes 12 cents per minute, did the store make or lose money on that transaction?
Did you buy 1 gallon for every five seconds of the clerk’s time you took up?
On the other hand, that shows that a store that sells 735 gallons an hour can afford to pay a cashier minimum wage to do nothing but ring up gas. So, like others said, volume.
The first and second paragraphs don’t quite go together. One is marginal thinking the other is average thinking.
The owner is going to have an attendant there whether he sells 1 gallon per hour or 1000 gallons per hour. And whether the 1000 gallons is one giant fill-up transaction, 1000 tiny transactions, or 50 typical transactions.
It’s only when enough customers pay slowly enough that other customers leave without purchasing, or don’t pull in at all, that the owner isn’t making more money from somebody buying a gallon and paying in pennies than that person not buying at all.
Many businessmen have gone broke not understanding this.
As with most other things in life, it’s easy to over-simplify it. Just a few things I can think of:
-Electricity
-Water
-Rent/mortgage
-Taxes
-Underground tank maintenance
-Underground tank replacement (When the EPA starts sniffing around, it’s BIG bucks if you have to dig up the parking lot and replace the tanks.)
-Parking lot maintenance
-Pump maintenance (abuse, wear & tear, new card scanners, calibration, etc.)
-Internet/satellite (for credit card processing)
-Payroll/taxes/bookkeeping/check printing
There is probably a lot more. Running a business is pretty complicated when you add everything up, but like other things you just have to delegate and/or break chores into chunks.
You’re right, I wasn’t clear what I was talking about.
In the first paragraph, I was specifically talking about the kind of store that sells a lot more than gas. In this scenario, the clerk has many duties besides ringing up gas customers. And ringing up customers takes him away from those duties.
And the store will only hire additional staff if the profit from sales will cover it.
So when customers are buying exclusively things on which the store makes little or no profit, that makes it hard on the clerk. (More work to do, no hope of more workers to do it).
And it particularly pushes my buttons when someone who is buying exclusively stuff we make little or no profit on (gas or lottery, mostly) seems determined to make their transaction take as long as humanly possible.
Mrdeals, Does your friend making 35 cents/gallon live in a mansion by chance? If he’s making 15 cents/gallon he’s doing very well. I suspect he might be pulling your leg.
Having made gasoline for a good part of my working career, I gotta tell ya Rbroome while there was some low quality gasoline many years ago there isn’t now due to catalytic converters. It must fall in very narrow range of boiling points or it can’t be sold as gasoline and the gov’t is pretty strict about that since cat. perverters came along.
PC
[SIZE=“1”](I absolutely loved that refinery job. Great pay and bennies too.)[/SIZE]
Since folks are sharing stories of cheap gas,
Back in 1986 or 1987, there was an ARCO station in northeast Connecticut that was a few cents cheaper than the stations near it, so I filled my tank there.
I noticed 2 things: my car ran poorly and it smelled like jet fuel.
Not one to jump to conclusions, I did some testing. If I bought gas somewhere else, car started running fine. If I bought gas there, car ran poorly and smelled strongly.
So, I stopped buying gas there.
I can’t say for sure what the problem was there. I have never had a similar problem with cheap gas since. But I never trusted that one station again.
Or he may just be holding the land for redevelopment, and releasing the value of the capital equipment while he waits.