10-02-2006, 11:12 PM
[quote Carnos Jax][quote Grateful11]Remember they're only making 3-4¢ per gallon on gas at the station. They still lay claim to
this nonsense. I've heard them actually say this in the papers and on TV news. So I guess
the guy 30 miles away from my house selling it 30¢ a gallon is losing money, right.
From what I understand, for most privately owned (as opposed to oil company and gas distributor owned) stations, the gas part of it is a loss operation. Regular gas for sure is (they only make a penny or two) when you take into account pump repairs/upgrades and other tank maintenance. Premium costs about as much as regular, and so the stations make the most money here (about 15 cents or more, that is why you'll see some stations run Premium for the price of Regular days).
I've actually looked at the books and distributor invoices (my dad recently bought a Texaco station in Carrollton, Texas...northern suburb of Dallas). Before, I thought what a racket these gas stations and oil companies have.
Gas stations have to sign long term supply contracts. The prices (from what I understand) aren't fixed in the contract. They're set by oil companies for a particular market (the stations communicate with the oil company daily to determine that days market price). So, many times the station will buy gas at one price, then if it goes down, they'll take a loss on that shipment (the converse is true as well).
This is one reason why items in convenience stores cost so much. But where most gas stations make their money is alcohol and cigarette sales. This actually makes such businesses very lucrative.
Posted on Mon, Oct. 02, 2006
Charlotte hit hardest on gas
High demand holds up prices around city, former owner says
Charlotte-area drivers continue to pay gasoline prices higher than all but one other city in the Carolinas -- in some cases almost 30 cents more a gallon.
Motorists have been relieved as the Charlotte region's average has fallen by about 70 cents from $2.98 for regular in the past seven weeks. Experts suggest prices could slide soon into the low $2.00 range for the first time in over a year.
But the area continues to pay more at the pump than motorists in Raleigh, Columbia and all other Carolinas cities except Myrtle Beach, which is tied with Charlotte.
The reasons are not clear for Charlotte's high prices compared with those of other Carolinas cities since shortly after Labor Day.
Carolinas stations pay about the same average wholesale costs across the Carolinas. The tax in South Carolina is 13 cents less a gallon, which accounts for the traditional gap between the two states. And the last time the region's average fell below $2.30 a gallon, which was in March, Charlotte actually had the Carolinas' lowest metro-area price.
Major area station operators aren't talking, though one former station owner suggests they no longer fiercely fight over price.
A smaller chain owner said he charges more because he can.
"I'm going to get whatever I can get," said Olin Furr, who owns 18 stations in Union County. "I'm going to hang onto my price as long as my competitors will let me."
AAA Carolinas spokesman Tom Crosby blames steady demand despite prices that have been generally much higher than a year ago and station owners taking advantage of prices coming down slowly from the $3 range.
"There is no economic reason for this," he said. "They're just reacting to a desensitized customer base that thinks $3 means a lot and now sees $2.40 as not a big deal."
In September, drivers paid an extra $23.5 million to $28 million for fill-ups when Mecklenburg County gas stations booked earnings four to seven times more than recent industry norms, according to an Observer analysis of pricing data.
Add August, another month of unusually high earnings, and drivers shelled out an extra $40 million to $50 million over the last two months at stations.
"These guys are making a killing," said Wayne Baker, who until two years ago owned a small chain of stations in Union County.
This is nearly a repeat from a year ago.
After last year's hurricanes, stations also charged prices that boosted their earnings three to six times from normal, an Observer analysis found. Experts believed at the time stations were taking advantage of wholesale prices coming down from more than $3 a gallon.
Representatives with the region's dominant chains -- Petro Express, Sam's Mart and Circle K -- did not return calls last week.
Furr said stations are catching up after a tough and volatile first seven months of 2006: "I'm on this roller coaster, on the top one month, and then in a valley."
In a typical year, stations net between a nickel and a dime on every gallon sold, current and former operators said.
But last month, Charlotte stations nabbed average earnings, after taxes and estimated fees, of 36 cents a gallon, according to the Observer analysis. Adding August lowers the average just slightly to 32 cents.
That's still 27 cents more than what stations earned in June and July as well as around this time two years ago when stations charged about $1.85 a gallon.
State legal officials say they can do nothing unless stations are colluding on pricing (not found in investigations last year) or violating price-gouging laws (not used until a disaster or market disruption is declared).
Baker said he is unaware of any collusion, but said he believes that Petro, Sam's Mart and Circle K no longer need to jostle over price because drivers have not lost their appetite for gas.
"Consumers are letting them get away with it," Baker said, insisting that if station sales slipped 15 percent, prices would drop.
"These guys don't set prices on what they pay for gas," he said. "They set them on what gallons they're selling and what the guy across the street is charging."
this nonsense. I've heard them actually say this in the papers and on TV news. So I guess
the guy 30 miles away from my house selling it 30¢ a gallon is losing money, right.
From what I understand, for most privately owned (as opposed to oil company and gas distributor owned) stations, the gas part of it is a loss operation. Regular gas for sure is (they only make a penny or two) when you take into account pump repairs/upgrades and other tank maintenance. Premium costs about as much as regular, and so the stations make the most money here (about 15 cents or more, that is why you'll see some stations run Premium for the price of Regular days).
I've actually looked at the books and distributor invoices (my dad recently bought a Texaco station in Carrollton, Texas...northern suburb of Dallas). Before, I thought what a racket these gas stations and oil companies have.
Gas stations have to sign long term supply contracts. The prices (from what I understand) aren't fixed in the contract. They're set by oil companies for a particular market (the stations communicate with the oil company daily to determine that days market price). So, many times the station will buy gas at one price, then if it goes down, they'll take a loss on that shipment (the converse is true as well).
This is one reason why items in convenience stores cost so much. But where most gas stations make their money is alcohol and cigarette sales. This actually makes such businesses very lucrative.
Posted on Mon, Oct. 02, 2006
Charlotte hit hardest on gas
High demand holds up prices around city, former owner says
Charlotte-area drivers continue to pay gasoline prices higher than all but one other city in the Carolinas -- in some cases almost 30 cents more a gallon.
Motorists have been relieved as the Charlotte region's average has fallen by about 70 cents from $2.98 for regular in the past seven weeks. Experts suggest prices could slide soon into the low $2.00 range for the first time in over a year.
But the area continues to pay more at the pump than motorists in Raleigh, Columbia and all other Carolinas cities except Myrtle Beach, which is tied with Charlotte.
The reasons are not clear for Charlotte's high prices compared with those of other Carolinas cities since shortly after Labor Day.
Carolinas stations pay about the same average wholesale costs across the Carolinas. The tax in South Carolina is 13 cents less a gallon, which accounts for the traditional gap between the two states. And the last time the region's average fell below $2.30 a gallon, which was in March, Charlotte actually had the Carolinas' lowest metro-area price.
Major area station operators aren't talking, though one former station owner suggests they no longer fiercely fight over price.
A smaller chain owner said he charges more because he can.
"I'm going to get whatever I can get," said Olin Furr, who owns 18 stations in Union County. "I'm going to hang onto my price as long as my competitors will let me."
AAA Carolinas spokesman Tom Crosby blames steady demand despite prices that have been generally much higher than a year ago and station owners taking advantage of prices coming down slowly from the $3 range.
"There is no economic reason for this," he said. "They're just reacting to a desensitized customer base that thinks $3 means a lot and now sees $2.40 as not a big deal."
In September, drivers paid an extra $23.5 million to $28 million for fill-ups when Mecklenburg County gas stations booked earnings four to seven times more than recent industry norms, according to an Observer analysis of pricing data.
Add August, another month of unusually high earnings, and drivers shelled out an extra $40 million to $50 million over the last two months at stations.
"These guys are making a killing," said Wayne Baker, who until two years ago owned a small chain of stations in Union County.
This is nearly a repeat from a year ago.
After last year's hurricanes, stations also charged prices that boosted their earnings three to six times from normal, an Observer analysis found. Experts believed at the time stations were taking advantage of wholesale prices coming down from more than $3 a gallon.
Representatives with the region's dominant chains -- Petro Express, Sam's Mart and Circle K -- did not return calls last week.
Furr said stations are catching up after a tough and volatile first seven months of 2006: "I'm on this roller coaster, on the top one month, and then in a valley."
In a typical year, stations net between a nickel and a dime on every gallon sold, current and former operators said.
But last month, Charlotte stations nabbed average earnings, after taxes and estimated fees, of 36 cents a gallon, according to the Observer analysis. Adding August lowers the average just slightly to 32 cents.
That's still 27 cents more than what stations earned in June and July as well as around this time two years ago when stations charged about $1.85 a gallon.
State legal officials say they can do nothing unless stations are colluding on pricing (not found in investigations last year) or violating price-gouging laws (not used until a disaster or market disruption is declared).
Baker said he is unaware of any collusion, but said he believes that Petro, Sam's Mart and Circle K no longer need to jostle over price because drivers have not lost their appetite for gas.
"Consumers are letting them get away with it," Baker said, insisting that if station sales slipped 15 percent, prices would drop.
"These guys don't set prices on what they pay for gas," he said. "They set them on what gallons they're selling and what the guy across the street is charging."
![[Image: 1Tr0bSl.jpeg]](https://i.imgur.com/1Tr0bSl.jpeg)