8 pennies a gallon

[Constant Mesh]

https://www.washingtonpost.com/wp-dyn/conte...8052401961.html

As the pump prices keep going up and up the station only gets its 8 cents a gallon. Must make their income on beer, cokes and hot dogs.

 

[DaSpyda]

Exactly...why do you think there's no more "Full Service" stations, anymore?

 

[GunMD]

That's pretty unfortunate for the station operators. I wonder if this is the exception, or the rule...

 

[twowheelnut]

I ain't fully buying into that... Doesn't explain why the Exxon on the south end of town is .10 cheaper than the Exxon on the north side.

The lease deal though, I can believe.

 

[Tenchi]

We have the same situation for service stations here in West Australia. US Gal = 3.7L, 8c or closer to the 2c/L mark for us. Sounds about right - I have been told our BP servo's get about the same profit margin from petrol by two of my friends who manage service stations here. The only thing keeping them in business most of the time was in-store purchases, e.g. Milk, and running a cafe inside the service station.

 

[twowheelnut]

This does not a business model make: No one in their right mind would dedicate the kind of space and service attention to an aspect of their business that yields a GP of 2%. Nope, I don't give a crap how many slushies you sell, that kind of hit to the bottom line is in the realm of fantasy land.

 

[Tenchi]

This does not a business model make: No one in their right mind would dedicate the kind of space and service attention to an aspect of their business that yields a GP of 2%. Nope, I don't give a crap how many slushies you sell, that kind of hit to the bottom line is in the realm of fantasy land.

Hmm... 2% is kinda high to be honest.

In Australia, right now, 2-4c out of $1.63 per litre for premium fuel (that's about USD$6.50 per gallon) or thereabouts goes to the service station. Note in the link given, prices are given in $/L - multiply roughly by 4 to get the amount in USD$/gal ($/L * 3.98 = USD$/gal), and that the "best" prices are displayed on the front page, not the prices I actually have to fill up at.

I'll ask my manager friend how much profit they make on average at her servo just to entertain your query TWN.

 

[twowheelnut]

This does not a business model make: No one in their right mind would dedicate the kind of space and service attention to an aspect of their business that yields a GP of 2%. Nope, I don't give a crap how many slushies you sell, that kind of hit to the bottom line is in the realm of fantasy land.

Hmm... 2% is kinda high to be honest.

In Australia, right now, 2-4c out of $1.63 per litre for premium fuel (that's about USD$6.50 per gallon) or thereabouts goes to the service station. Note in the link given, prices are given in $/L - multiply roughly by 4 to get the amount in USD$/gal ($/L * 3.98 = USD$/gal), and that the "best" prices are displayed on the front page, not the prices I actually have to fill up at.

I'll ask my manager friend how much profit they make on average at her servo just to entertain your query TWN.

2% net might be passable, but GP? Epic Fail.

 

[FJRBluesman]

This does not a business model make: No one in their right mind would dedicate the kind of space and service attention to an aspect of their business that yields a GP of 2%. Nope, I don't give a crap how many slushies you sell, that kind of hit to the bottom line is in the realm of fantasy land.

Gunny!

No one in their right or other mind would ever accept making a profit of only .2% @$4/gallon. You'll never make it up on sales of beer, smokes, and chips. Some try to make it up if they have a garage for repairs. So then what about AM/PM marts etc?

I remember hearing that they only made about $0.04 to $0.07 per gallon way back when gas was $1 per gallon. Again lower profit but better then what was stated. I also have heard now that they make anywhere from $0.25 to $0.75 per gallon, still only .7% to 1.9% profit per gallon. I would not risk all that for such dismal proceeds.

Most of the stats for oil production, gas sales, and profits, etc., are online and some oil industry websites showed what those were. Here's a gub-ment website. Gas facts Clicky!

 

[twowheelnut]

...a profit of only .2% @$4/gallon.

Whoopsie! Did I forget to move the decimal point? :lol: At .2%, you are no longer 'in business'. You have a hobby - at best.

 

[Tenchi]

Hi guys, got a reply from my manager friend.

Background info: Shell refinery processes all petrol going through West Australia, regardless of whether they actually refined it there or just purchased it somewhere else.

The only changes to her response is I corrected her crappy spelling and capitalised her sentences (first letter after the full stop. She did the rest of the capitalisation).

EDIT: Does that makes her a capitalist? (Bad joke, I'm sorry...)

------------------------------------------------------------------------------------------------------------------------

Q: What's the profit of a fuel station that you've worked at (either past or present) for a month or so, and if you can remember or can release that info, what slice of the profit was from fuel?

A: First of all, people need to understand the different between MARGIN and PROFIT .... margin is the difference between what the station pays for the fuel, and what they sell it for, this is usually around 2-4 cents a litre (if it wouldn't get me fired, I could show you invoices to prove this LOL), whereas PROFIT is the amount you actually bank from selling that fuel, after operating costs are taken out

Fuel itself is actually a LOSS product ... in other words, it actually costs the shop MORE money to supply and sell to the consumer, than we pay for it in the first place ... please remember we are not talking about SHELL here, I have no idea how much the actual oil companies make, we are only talking about the actual SHOP where your fuel is purchased

You are correct in that ALL of our profits come from items in the shop. Soft drinks for example have about a 30% margin on them, confectionary anywhere from 10-20% margin.

As an example, the shop I run sold 170000 fuel last week, on which we made $0. We had shop sales of approx $32000, the margin on this was probably around $4000. Out of this you have to deduct wages, electricity, teas, water, phone, office expenditure, etc etc

To break it down to its simplest point, last financial year my store had an actual PROFIT of less than $30000 ... that is for an entire YEAR

------------------------------------------------------------------------------------------------------------------------

I also asked why anyone would bother setting up a fuel station at all if the return per annum is so low on such a costly investment. Please note she runs a servo owned by a massive corporation, not an independent.

 

[twowheelnut]

Hi guys, got a reply from my manager friend.
Background info: Shell refinery processes all petrol going through West Australia, regardless of whether they actually refined it there or just purchased it somewhere else.

The only changes to her response is I corrected her crappy spelling and capitalised her sentences (first letter after the full stop. She did the rest of the capitalisation).

EDIT: Does that makes her a capitalist? (Bad joke, I'm sorry...)

------------------------------------------------------------------------------------------------------------------------

Q: What's the profit of a fuel station that you've worked at (either past or present) for a month or so, and if you can remember or can release that info, what slice of the profit was from fuel?

A: First of all, people need to understand the different between MARGIN and PROFIT .... margin is the difference between what the station pays for the fuel, and what they sell it for, this is usually around 2-4 cents a litre (if it wouldn't get me fired, I could show you invoices to prove this LOL), whereas PROFIT is the amount you actually bank from selling that fuel, after operating costs are taken out

Fuel itself is actually a LOSS product ... in other words, it actually costs the shop MORE money to supply and sell to the consumer, than we pay for it in the first place ... please remember we are not talking about SHELL here, I have no idea how much the actual oil companies make, we are only talking about the actual SHOP where your fuel is purchased

You are correct in that ALL of our profits come from items in the shop. Soft drinks for example have about a 30% margin on them, confectionary anywhere from 10-20% margin.

As an example, the shop I run sold 170000 fuel last week, on which we made $0. We had shop sales of approx $32000, the margin on this was probably around $4000. Out of this you have to deduct wages, electricity, teas, water, phone, office expenditure, etc etc

To break it down to its simplest point, last financial year my store had an actual PROFIT of less than $30000 ... that is for an entire YEAR

------------------------------------------------------------------------------------------------------------------------

I also asked why anyone would bother setting up a fuel station at all if the return per annum is so low on such a costly investment. Please note she runs a servo owned by a massive corporation, not an independent.

Thanks for that info and in short - that's insane beyond belief. Kindly let your friend know that she needs to get a new hobby that does not cost her so much. :lol:

 

[Tenchi]

stuff

Thanks for that info and in short - that's insane beyond belief. Kindly let your friend know that she needs to get a new hobby that does not cost her so much. :lol:

Hahaha... will do... she just works there... doesn't own the place. She only works there for the staff discount on the high octane fuel for performance driving.

 

[FJRBluesman]

...a profit of only .2% @$4/gallon.

Whoopsie! Did I forget to move the decimal point? :lol: At .2%, you are no longer 'in business'. You have a hobby - at best.

yep. Forgot on both counts to move it over, arrgh! Pirate math at best. That's what happens when you go to the LA Unified School System. :lol:

 

[Tenchi]

I also asked why anyone would bother setting up a fuel station at all if the return per annum is so low on such a costly investment. Please note she runs a servo owned by a massive corporation, not an independent.

A: For the setup costs of a new shop, SHELL cover most of that (i'm assuming their profit margin is MUCH higher than ours)

We opened a new store in Souther River last month, and I have seen their figures, it took the shop 4 months to recoup their setup costs and start making a profit

And they bother in the first place because if you times $30000 by the 200-odd stations Coles Express own across the country, it soon adds up.

-----------------------------------------------------------------------------------------------------------------------------------------

Still, $30k x 200 is only 6 million. Shell made over AU$25 billion last year so it's a drop in the ocean. However, it is a worldwide conglomerate so if you multiply this across all the capital cities across all the states around the world, that might explain the increase in profits (Perth is a very small capital city, so this would be closer to a low-profit case scenario).

 

[k7lvo]

Still, $30k x 200 is only 6 million. Shell made over AU$25 billion last year so it's a drop in the ocean. However, it is a worldwide conglomerate so if you multiply this across all the capital cities across all the states around the world, that might explain the increase in profits (Perth is a very small capital city, so this would be closer to a low-profit case scenario).

SOMEBODY has to retail the fuel (and pocket that paltry $6 Million) so that Shell can pocket the $25 Billion. Apparently Shell figures that it might as well be them...

I heard a news report a few days ago recounting that many gas stations have seen a 30% drop in fuel sales, but that their biggest problem since that meant that they'd also seen a 30% drop in traffic through their convenience stores, they were really hurting. This would seem to support the assertion that the profits are not in the fuel sales...

 

[jekirby]

The above detail backs up what a pastor friend I had I college told me. He had a chain of 8(iirc) convenience store chains around the Big Stone Gap area. He commented that his net profit was around 1%.

The above detail backs up what a pastor friend I had I college told me. He had a chain of 8(iirc) convenience store chains around the Big Stone Gap area. He commented that his net profit was around 1%.

 

[Constant Mesh]

Paying at the pump with a card must be a disaster for the stations. I rarely go inside when I get fuel. So I don't buy anything.

The transaction fee the station pays to the card companies is based on the sales dollars. As the prices rise the fee rises even though they're still getting only 8 cents a gallon.

Seems like the land value would be a function of the station's sales. If the station doesn't make much money the land offers no value as a fueling station. It may have value for another business activity.

The station operator has to pay for the fuel before he sells it. So he has interest carrying costs for each $35k tanker load.

 

[jekirby]

Paying at the pump with a card must be a disaster for the stations. I rarely go inside when I get fuel. So I don't buy anything.
The transaction fee the station pays to the card companies is based on the sales dollars. As the prices rise the fee rises even though they're still getting only 8 cents a gallon.

Seems like the land value would be a function of the station's sales. If the station doesn't make much money the land offers no value as a fueling station. It may have value for another business activity.

The station operator has to pay for the fuel before he sells it. So he has interest carrying costs for each $35k tanker load.

A local BP station charges a transation fee if you use a card. It is automatically figured at the pump. I do not know if this is BP or this station. Wife got caought once and we just avoid that station. I would assume the merchant fees are figured into the net profit figures.