Who gets gas station profit?

Question

If a gas station makes, say, 2 cents a gallon profit...what happens to the rest when another gas station 1 block away (same brand) sells gas for 10 cents more? Clearly, the bulk gas price is the same, but who gets the 10 cent difference? Similarly, what about locale, where one part of the country could have gas prices almost a whole dollar lower than another?

Answer 1

Here's the correct answer. The gas station owner gets the profit he makes, but the profit isn't as much as you think. For starters, the bulk gas price ISN'T always the same in each area...some stations/ dealers, even those of the same brand, can pay different levels. For example, smaller independent owners who only have one or two stations don't have the buying power of multiple station owners or larger chains...so they can't get the bulk discounts that larger chains can.

As far as location, it makes a huge difference in the cost. As another answerer pointed out, there are different regional gas formulations, and there are different state and local tax amounts, and as you know, taxes make up a goodly amount of the pump price. Also, certain regions that are in closer proximity to refineries and depots may get their gas a tad cheaper, as delivery costs are less.

Here's something that I can tell you for a fact, as I once managed a gas station...no matter what the gas price is, the station doesn't make a lot on gas...they try to make it up by selling a larger volume. Percentage-wise, they make far more money on chips, soda, and beer....that's why virtually all gas stations anymore carry these products in large quantities. At the station I ran, the "in-store items" profit pretty much paid for the overhead and salaries; the gas profits, such as they were, were gravy for the most part.

Hope this helped.

Answer 2

Most gas stations are leased or owned by independent businessmen. They determine the markup that they will charge. Depending on where they get their fuel, they may pay more or less than another station just down the street. A brand name station may pay one price, and another station may be buying on the spot market, and paying less or more. The profit is used to pay for the overhead and employees of the station.

The reason that gas prices are different in different areas has to do with two governmental factors. In some areas, different (more expensive) blends are required, due to EPA rules. There are also differences in taxes that states and localities charge!!

Answer 3

Oil companies call it "pricing for the market." If they can get away with charging more for gasoline somewhere, they will do it. But the profit usually doesn't go to the gas station owner. Owners pay the oil company a wholesale price for their gasoline, mark it up a few cents and sell it back to us. As for locale, various elements go into the cost of gasoline such as environmental regulations, transportation and taxes. Check out the graphic below.

Answer 4

The gas station gets their profits. Differences in price per gallon can be effected by how much they paid or will be paying for the next shipment. The distributor makes their profits selling it to the gas station.

Answer 5

the store selling the gas receives the 2 or 10 cent profit in your example

Answer 6

George W. Bush and his Family gets alot of the money cause him and his family own most the crude oil stocks there for he get most the gas money. what a lovely president to rip off his own country. and ppl actuly voted for this man. he needs to be impeached for treasin

anyone agreee??? if so let me know y and stuff email me [e-mail] me my husnabd and many other ppl around the us are trying to help get him impeached cause it would make this country btter

Answer 7

The oil industry is crooked.