Gas Stations Getting Pinched At The Pump
SPOKANE – Gas prices are on a roller coaster right now and while oil companies are making huge profits local gas station owners are struggling to make ends meet.
It seems as though every time you hear about the price of crude oil jumping up, the cost is immediately passed on to consumers at the gas pump. But what happens when the price of crude oil drops?
On July 11th, crude oil hit a record high of $147.27 per barrel. If you’ve been watching gas prices around Spokane the price peaked at roughly $4.19. However since July 11th, the price of crude oil has dropped more than $28, closing at $119.17 on Tuesday.
However the average gas price in Spokane is $4.09 with prices varying from station to station as much as 20 cents, which has drivers wondering why gas prices haven’t fallen in line with falling oil prices.
Local gas station owners say there is a long list of factors that determine how they price their gas including credit card fees, sales tax, federal tax and delivery charges. Another factor contributing to the range of gas prices we are seeing is not every gas station owner buys their gas the same way. Some buy it weeks in advance meaning they didn’t buy it at today’s oil prices.
The most important of all deciding factors is what it costs them everyday to open their doors.
Scott Thompson owns the Chevron gas station at 3rd and Monroe in downtown Spokane and he says that while gas prices are high and oil companies are profiting station owners are not reaping the benefits. In fact he says if anything, it has cost them money.
“Six that I can name that have gone out of business in the last sixty days just because the margins are not sufficient enough to sustain the amount of work and the amount of people you have to employee to be open for convenience,” Scott Thompson said.
The price of fuel has forced people to look at alternative ways of transportation which in turn means cutting back on their trips to the gas station.
“We’re seeing people find alternatives to ride to work to ride a bike maybe they’re buying a scooter, who knows they are clearly making some lifestyle changes to accommodate the increasing price of fuel,” Thompson said.
And that’s making it tough for a business dependent on the number of people they get to walk through their doors.
“You need a car wash, you need a store you need espresso or a deli or other items that supplement the gas you can’t make it on just selling gas,” he said.
With the low profit margin on selling gas it means that convenience store owners have some tough decisions to make.
“Every retailer has to pick their expenses and their mark up and do what they think is economically correct at their store,” Thompson said.