Tuesday, October 20, 2009

Gas Station Operations and Gasoline Prices

A thought now that gasoline prices appear to be heading up slightly and, perhaps, may go higher with a weaker dollar and inflation.

Stations earn between 10 and 15 cents on a gallon of gas, on average. When prices climb, gas stations have their profit margins shrink in order to remain competitive. So they earn less per gallon.

Also, their credit card fees, are about 2 ½% of all purchases. That cut is always a significant factor affecting margins.

Furthermore, gasoline prices go up faster than they go down. That is the way supply and demand normally influence wholesale as well as retail gas pricing.

So why blame gas station operators for high gas prices when they occur?

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