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dan45mcc

Hit by high prices and fees, some gas station owners stop selling fuel

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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.  ......

 

 

http://www.jsonline.com/story/index.aspx?id=610122

 

 

There's a guy just waiting for Ethanol to call him ... get this guy set up wiht a E85 Station

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I guess in the context of the article, the "sales up, profit down" theme makes sense.  But I really wish they would clarify the "profit down" part.  Doesn't seem like profits are down for the oil companies, and they are certainly not down for the government.

 

I  have also seen this theme many times over.  I have even read that allegedly, the c-store operators sell gas at very small profit, or even at cost just to get people in the door to buy a bottle of water at $2.09 or ice at $2.00/bag

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Oil companies don't own the oil anymore.  The countries own the oil and sell it based on a spot or benchmark price.  US oil companies are being replaced in size by national oil companies like Aramco in Saudi Arabia.  Aramco is number 1, Pemex is 2, PDVSA may be 3, ExxonMobil is the 4th or 5th largest oil company now.  We actually import the largest amount of our stuff from Canada now too.

 

Government is now making the lion's share based on gasoline and diesel. Refiners are number 2, they make about 30%. Wisconsin takes 32.9% on gasoline and E85.  The feds take 18.4 and then there are some city and/or county cuts too. 

 

Its estimated that speculation drives a minimum of 30% and as high as 50% of the price of refined products. 

 

Wisconsin also mandates that fuel stations must make at least 9.2% on their costs.  9.2% with a $3.00 wholesale? You can do the math.

 

 

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I agree with you mpersell on the speculation aspect. Since Feb contract period for summer months- unleaded is up about 75 cents primarily driven by traders more than real demand / shortage (though BP Whiting IN partial shut down did tighten the Chicago area which also includes part of WI and Michigan driving basis wild).

 

I also sense you feel that WI. 9.12% minumum markup is questionable at a $3.00 gasoline wholesale when it was adequate in the past at $1.00 or less. Amen! The only constant % from $1.00 to $3.00 is the 2-3% credit card fees. To add insult to injury the ethanol price at the terminal does not reflect the real market- effectively pricing it out of the market at times, restricting competition and innovation.

 

Is it your opinion that on the govt oil leases that govt is paid more as crude goes up or does the lease stay flat fee and oil companies benefit from high crude #'s?

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I don't have any idea about the leases.  I'm more familiar with the downstream procedures.

 

Bio Fuels are also taxed at the same rate as gasoline.  While many hide behind a noble cause, you'll find that governments are not going to make a decision that may reduce their appetite for fuel taxes...regardless of any other factors.

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1outlaw, I have a friend on an airplane website that drills in deep Gulf of Mexico water. He says that an area goes to the highest bidder and then whatever hydrocarbon is extracted(if any is found) has a 10 to 15% royalty due based on oil or gas price.

Marty

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Thanks Cessna and mpersell,

 

I hear you on the biofuel taxation issue- Wisconsin refuses to tax on BTU content so e85 users do pay more road tax per mile and the proposed WI tax on oil companies appears to also apply to ethanol (e85 might get exempted but this is unknown at this time).

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