President Joe Biden demanded that gas stations lower their prices over Independence Day weekend.
“My message to companies that run gas stations and set prices at the pump is simple: We are in a time of war and global peril,” the president wrote in a tweet. “Reduce the price you charge at the pump to reflect the cost you pay for the product. and do it now.
Gas prices have skyrocketed this year – hitting around $5 a gallon in many parts of the country before starting to pull back a bit recently. Prices in the Meadville area hit $5.09 for a brief period in early June and are now around $4.80 per gallon. The national average is around $4.81 per gallon.
According to the Chicago Tribune, about 95% of America’s 145,000 gas stations are not owned by major fuel refiners, but by independent retailers licensed to sell certain brands of gasoline.
And these family convenience stores make most of their money from lottery tickets, pop and chips, or car repairs — not gasoline.
Two independent gas station owners in the area support these profit margins.
Their profits range from about 5 cents to 15 cents per gallon sold after taking into account all costs, including purchase price, freight, regulatory fees and taxes.
The federal tax is 18 cents per gallon on gasoline while the Pennsylvania tax adds another whopping 57.6 cents per gallon.
“It’s a loss leader type situation,” John Bausch, owner of the Bausch gas station in Cambridge Springs, said of fuel sales.
While gasoline is offered, Bausch relies on vehicle mechanical services for most of its business, as well as small-scale convenience store items and some lottery sales.
“When gasoline was selling on the street for $5 a gallon, I was at $5.19,” Bausch said. “They were selling it for less than I could buy it.”
Bausch said his profit margin was 5 to 8 cents per gallon – if he’s lucky.
“There are taxes for each gallon sold. There is a delivery charge of 3.5 cents per gallon. The state has an underground storage tank fee of 1 cent per gallon,” he said.
In addition, the current market situation is causing gas prices to fluctuate, according to Indy Patel, manager of the Quick Stop convenience store in Meadville.
“The price (of gasoline) changes every day now,” Patel said of the oil market in general. “We can make 10 to 15 cents a gallon, but we have other items in the store that we rely on.”
Like Bausch, selling gasoline is an attraction to draw people in, Patel said. But the company relies on selling snacks, prepared foods, beverages and cigarettes at its convenience store to make money.
“We have to adjust our price to the local market,” he said of gasoline sales. “We could try to sell it at a higher cost, but nobody would buy it.”