10-01-2006, 09:17 PM
[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.
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.