Retailers Feel the Pain at the Pump, Too

Analysts expect the price to stay high with Memorial Day and the summer vacation season six weeks away.

April 13, 2011

BELLEVILLE, Ill. - Analysts spewed out bad news for drivers in states that are facing $4 or more per gallon, reports the Belleville News-Democrat reports.

Crude oil prices advanced around 33 percent over the last six weeks, and that, coupled with refineries switching to summer blends, have contributed to the price increases. But gasoline retailers are asking consumers not to blame them for the higher costs.

Rob Forsythe, president of FKG Oil Co., which owns and operates MotoMart, said gasoline stations are not the gainers when fuel prices soar. "I don't know who is benefiting," he said. "It's certainly not the retailers. It's like killing the messenger."

NACS spokesman Jeff Lenard added that gasoline retailers make their money from inside store sales of food and other products. When fuel costs rise, profit margins are squeezed.

"While gas is about two-thirds of the overall revenue dollars at convenience stores, they are less than 30 percent of the profit dollars," said Lenard. "There is not much money in selling gas. If you can't get the customer in your store, you won't be in business for very long."

With the higher prices, drivers may be fueling up less. During the week of April 1, motorists purchased around 2.4 million fewer gallons of gasoline from the previous year ?" a decline of 3.6 percent, according to MasterCard SpendingPulse.

Advertisement
Advertisement
Advertisement