Lower Gas Prices Mean More Profit for Gas Station Owners

By Automotive Staff | October 29, 2008
The price of gasoline in the U.S. has dropped like a stone falling off the Leaning Tower of Pisa. One would think that the nose dive would cause gasoline station owners to have the willeys and go home every night depressed and unable to eat. But that is not the case. The Wall Street Journal reports that gas station owners actually like the fact that gasoline prices have headed south. Apparently they were not making much profits when the gas prices were higher; instead, they were squeezed by the oil companies that supplied them. It works like this. Gross margins averaged about 10 cents a gallon for the owners and from that, retailers had to subtract credit card fees, which were about 12 cents a gallon. You do the math and you can see that the gas station owners were hurting, too. Now credit card fees imposed on the station owners are lower, too. Thus a greater chance for them to make a little change. Our take? Goody for the station owners. We wonder, though, if the above holds true as consumers continue to drive less despite falling gas prices. You can't make money if no one's out on the streets refueling their cars, you know.
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