Independent Stations Rely on Inside Sales

As a review of some Pennsylvania stations reveals, fuel sales are not enough to make ends meet.

July 29, 2011

PITTSBURGH - The Little Store in Upper Burrell, Penn., sells fuel but owner Eric Weaver would rather his customers come inside for the merchandise, the Pittsburgh Tribune-Review reports.

Credit card transaction fees eat into what little profit there is on gasoline sales. "If you buy $5 worth of gas and swipe your card at the pump, we're losing money," said Weaver. Because his small station only purchases gasoline weekly, he isn??t updating prices daily.

Inside the convenience store, he stocks staple groceries and has several tables to invite customers to sample the Italian food. "The locals know that we can't always compete on the price of gas," he said. "They come here because they know we're locally owned and like to support us. We're grateful for that."

Weaver and other independent stations strive to inform their customers that they only sell branded fuel and are not affiliated with the oil company. Big oil companies have largely stopped selling gasoline at the customer level because "the margins in retail are very low and it's highly competitive," said John Felmy, chief economist for the American Petroleum Institute.

The profit is in getting the oil out of the ground and refining it before selling it to distributors to disperse to gasoline stations. An exception has been Sunoco Inc., based in Philadelphia, which quit exploring for oil 20 years ago and now has a business that involves pipelines, refineries and gasoline stations.

"We think it's still a good business, and there's opportunity in the marketplace with the other companies pulling out of retail," said spokesman Thomas Golembeski.

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