When gas stations run out of gas

When gas stations run out of gas - BusinessWeek.com- msnbc.com

Maybe we could call it the gas price/gas station profit paradox: as prices rise, profits at many stations fall. Simply put as the wholesale price of gasoline rises to new heights, small gasoline stations are finding their margins squeezed. With a tank of gas now easily exceeding the cost of your first “real date” most folks are using credit cards to pay for their little tank of gold. One company has seen credit use go from 25% of their business four years ago to 75% today. The added cost per gallon that a credit card adds varies between 5 and 12 cents, that’s no small figure for all those Gas Buddy comparison shoppers out there. Station owners find that unless they price their gas at unprofitable levels, consumers will choose other stations who are willing and able to make up the cost elsewhere. If giants like ExxonMobil are getting out of the gas station business what does that mean for the little guy on the corner? What may happen is that continued attrition will allow the remaining stations to jack up their prices to more profitable levels. None of this is good news for the consumer.