Posted on 05/24/2007 5:48:44 AM PDT by kellynla
As gas prices hit another record last Friday, Jeff Curro couldn't take it anymore.
He wasn't a motorist at the pump fed up by the blur of numbers spinning higher as he filled his tank.
Curro is a gas station owner who has stopped selling gas to his own customers.
After selling gas at N. 124th and W. Burleigh streets for 20 years, Curro turned off his pumps at his Shell station in Brookfield when the price he was being asked to pay was just too much.
Including the wholesale cost of gas and other taxes and charges, he was being asked to pay $3.44 a gallon Friday, a day when the competing stations down the street were selling gasoline for $3.47.
"Three cents a gallon doesn't cut it," Curro said. "It doesn't pay the bills."
Add to that the money he loses every time a motorist uses a credit card at the pump, and there was no reason to keep selling gas, Curro said.
Credit card companies and banks get an average of 2.75% on every gallon of gas sold, and credit card processing fees now rank as the second-biggest expense for gas station operators, according to the National Association of Convenience Stores.
"The way I see it is, I'm doing all the work of providing the labor, the wages, the electricity, the lighting, the maintenance of the pumps, the repairs and the insurance, which is quite substantial," Curro said. "I'm doing all the work, and somebody else is getting fat on me."
Curro isn't alone in deciding to not sell gas anymore. Casey O'Gorman did the same thing. In business for 25 years near State Fair Park, his West Allis service station is now doing business exclusively as Auto Analyzers. The Shell name came down a few months back.
"I finally had to just pull the plug on it and say, 'I can't afford to do it anymore,' " O'Gorman said.
High wholesale prices Curro and O'Gorman are leaving a relatively small and disappearing group of service station owners who both sell gas and repair cars.
Independent auto-repair shops face competition from car dealerships and quick-lube repair shops, and in the sale of gasoline, they compete against full-line convenience stores.
Most gas stations today double as convenience stores, and although they generate more than two-thirds of sales from gas, two-thirds of profit comes from in-store sales of cigarettes, drinks and food, according to the convenience store association.
When drivers are paying more, they think that means higher profits for the filling station, said Bob Bartlett, executive vice president of the Wisconsin Petroleum Marketers & Convenience Stores Association.
The case of the two Shell stations stopping sales of gas illustrates the challenges faced by independent station owners across the state, Bartlett said. Nine of 10 stations in the state are independently owned and run, he said.
Between Feb. 1 and Monday, Bartlett said, the average wholesale price paid by service stations in Milwaukee to buy gasoline rose from $1.66 to $2.94. Add in taxes paid to the federal and state governments, as well as transportation costs, and the average service station had to cover $3.47 on Monday, without charging any profit. On that day, stations were charging their customers $3.47 on average in Milwaukee, according to AAA's Daily Fuel Gauge Report.
"People are upset about oil and gas prices, but it's not this guy right here," Bartlett said of the independent gas station owner. "He's not OPEC. He's not refining it. He's buying it kind of like I am, right at the end of the line here."
Sales up, profit down Curro has been thinking about shutting down his gas pumps for about a year, and he has complained to his supplier about prices.
When he shut down his pumps, he was charging $3.59 a gallon, 12 cents higher than the competing stations nearby.
"Even at $3.59, I was making 15 cents, but I was still giving 10 of those cents to MasterCard," he said.
Nationally, the Association of Convenience Stores estimates that sales rose 12% but profit fell 23% industrywide last year, and for the first time, credit card fees were higher than the industry's profit.
Lower margins on the sale of fuel and credit card fees were the two main factors behind the drop in profit, the association said, as profit margins on the sale of fuel dipped to their lowest point since 1983.
Until January, O'Gorman and the predecessors at S. 84th St. and W. Greenfield Ave. sold gasoline on that corner since 1938.
He says he never made much money selling gas but started seeing margins nosedive last year when gas prices rose.
"More and more, it was crowding out my real form of income," O'Gorman said, referring to car repairs.
"Then you listen to the public, and they say we're gouging them. Who needs to listen to that? I'd need to have my head examined."
Are you telling me to do something or are you just adding to the general conversation of this thread?
Regarding the restrictive power of oligopolies and govt laws, how does any entrepreneur build a new refinery in the US, even an oligopolic oil company which has “obscene” profits, because money is sitting in their “bank account” that could and should be used to build more refineries?
The government is the problem, first, last and in the meantime.
oh FGS - “obscene” profits ??? money that “could and should” ??? then you say “gov’t is the problem” ?
You need to go look in the mirror and ask yourself - am I in favor of a free market or do I just parrot Dim talking points ?
Why would anyone even try to build a new refinery in this country - oil company or entrepreneur - when the permit and environmental impact studies, regulatory restrictions and moonbat envirowhackos will take you decades of time and oceans of money long before the first bulldozer hits the site. And that’s long before you get to make a fairly measly 9% profit on your investment...
only to have that small profit called obscene by ignoramuses in economics and math.
See yourself in that mirror yet ?
Aye, therein lies the rub.
My local service station owner says he makes nothing on the gasoline, which I believe. The gasoline is a convenience for his regular customers, who get their car service from him and he can do most car repairs. I continue to buy my six gallons a month from him rather than go down the street to the 7-Eleven because he is a local businessman and provides full car service. The price difference of 25 cents is not worth dropping my support.
with all the oil you guys are sitting on up there;
you all should be getting free gas! LOL
No joke. After construction of the TransAlaska oil pipeline I figured those who worked on the project (including myself) should get their gasoline free for the rest of their lives.
We can also allow an increase in supply by allowing more refineries and oil exploration.
Well the natives are still getting their biannual royalty checks aren’t they?
Last I heard it was about $1,400?
The Alaska Natives get $30,000 a year. That was ANCSA. The PFD dividend would be about $1100 this year for those who apply, which I don’t. In about four years Alaska will be in a financial bind and the status of the PFD might be in doubt and there could be an income tax instead.
It’s not a discount for cash, it’s a surcharge for using a credit card, which is perfectly reasonable in my view.
And he was working for a silent partner, the partner who tells him what to do and makes more work for him, but doesn’t lift a finger to help out with the work. The partner who doesn’t change the oil, put air in the tires or sweep the floor. The blooming GOVERNMENT which has its hand out and takes its cut right from the top, and doesn’t care if you make money or lose money.
They were a 503(c) when I worked there as a contractor in 1999.
From the November, 2006, article I linked to above...
:It was its first full quarter as a publicly traded company. MasterCard sold stock to the public for the first time in May.:
Looks like they stopped being nonprofit last year.
This presumes that those who buy from the refineries are interested in increasing reserves of fuel. It seems they have a good handle on the system and would be hesitant to upset the status quo.
Sad fact is the distributors are trying to charge $3.44 a gallon while the spot price is $2.2288 per gallon (NY Harbor, 5/22/07). Federal gas tax is $.184 and Wisconsin is what, $.329? That adds up to $2.74. Even at the worst spot prices this past month, you’re looking at about $3.06.
So even if the spot price dropped to $.3003 per gallon as it was on Dec 24, 1998, they would be looking to charge the stations $1.63 a gallon.
On 12/24/98, average prices were about $1.01 a gallon.
In other words, someone (and not the station) is making a LOT more than they used to after the actual refining of gas.
I know an Mobil station only selling 93 gas....
Question: will this new price gouging bill send America into oil crisis?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.