Even with the discount however, I can't imagine that Kroger's would allow themselves to lose money. They have to be breaking even at least. That ought to give us an idea of what the real gas price is right now.
It's not hard to determine the "real gas price":
That shows the average wholesale price of unleaded gasoline. Note that it is BEFORE blending with alcohol and before any gasoline taxes.
Kroger may be losing money on this one transaction -- it depends on whether they are paying full price for the gift cards or the merchants are selling them gift cards at a discount. But, if they are indeed losing money, it is what is called a "loss leader".
Merchants are willing to take a loss on selected items in order to get you in the door. The expectation is that you will buy other things, and that profit will make up the loss.
It's a psychological marketing game.... just like why they put milk at the back of the store, and candy and magazines at the checkout register.
Could be a 'loss leader', where they'll lose a little on one item to get you in where you spend money on products they will make money on.
Pretty common sales tactic, and few people will only buy the loss leader item. Any more, loss leaders are usually tied to spending a certain amount in the store which pretty much guarantees a profit.