• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Gas Station Owner Struggles With High Prices

Posted on: Friday, 7 October 2005, 21:00 CDT

By Laura A. Schmid, The Sun, Port Charlotte, Fla.

Oct. 7--DESOTO COUNTY--With gas prices soaring to $3 a gallon and higher, consumers are quick to notice if a gas station seems to be charging excessively high prices and attempting to price-gouge customers.

That might seem to be case at the 761 Grocery Bakery and Deli on County Road 761 in DeSoto County, with posted prices of $3.559 for regular, $3.759 for premium and $3.599 for diesel. But manager Jacob O'Brien, son of the gas station owner David O'Brien, said the independent store makes only a two-cent profit on each gallon of gas.

"We don't make a killing off of anyone," O'Brien said. "When gas prices go high, nobody stops in. I lose money when prices go high."

O'Brien pointed to a stained, worn piece of paper taped to the checkout counter that spelled out exactly how the gas station wound up with its prices, titled "Who gets your money!"

The initial "backprice" charged by the oil refineries is $2.84 per gallon. Fifty cents then goes to state and federal taxes. Another nine cents goes to fees and handling. Next is 10 cents for credit-card bank fees. This gives a total cost to 761 Grocery of $3.53 per gallon. The gas station then adds on two cents, leading to the $3.55 per gallon cost.

The reason 761 Grocery has passed along these costs is because it is an independent gas station. O'Brien said that major gas stations can charge lower costs because they are larger chain operations.

O'Brien explained that this still barely covers the cost of labor, electric and maintenance to run the business. He said the store makes a slight profit from the bakery, deli and convenience aspects of the store.

Although the 761 Grocery is making barely enough money to cover the costs of selling gas, O'Brien said the business has a steady stream of loyal customers who continue to come regularly.

Despite this, the family has decided to go out of business.

"We've been here 12 years," O'Brien said. "We're selling out. We've had enough."

O'Brien said the gas station has been for sale through Randol Realty for two months, but the family-owned business did not have a specific timeframe for being sold. The family plans to move to Greenville, Tenn., once the gas station is sold, where an uncle of his lives. O'Brien said they likely will go into the real estate business at that point.

While the price at the 761 Grocery may have been the highest in the area Thursday, Arcadia also had one of the lowest prices. Gas was $2.83 (rounded up from $2.82.9) at the Hess station at U.S. 17 and Pine Street.

That price, nine cents lower than it was a week ago, helped reduce the area average by two cents on the Sun's weekly Gas Gauge, an informal survey of retailers in Port Charlotte, Punta Gorda, North Port, Englewood and Arcadia. The average Thursday was $2.97, compared to last week's average of $2.99.

Area gas prices were all over the map Thursday. At the Sunoco station on the corner of U.S. 41 and Kings Highway, the $2.90 price was 10 cents lower than last week's price. The price also was 10 cents lower at the Chevron station in North Port ($3 Thursday).

It was six cents lower at the Chevron station on U.S. 41 in Port Charlotte ($3), a penny lower at the BP station in Charlotte Harbor ($2.99), and six cents lower at the RaceTrac in Charlotte Harbor ($2.89).

On Kings Highway approaching I-75 -- where gas prices routinely have been among the highest in the area -- prices dropped at three of four retail outlets. The $3.10 price at the BP and Chevron stations was 10 cents higher a week ago, while the Hess station had lowered its price a penny, to $2.98.

Conversely, the Circle K on Kings Highway hiked its price 20 cents, from $2.80 to $3, over the last week.

At the Citgo and BP stations on Burnt Store Road and U.S. 41, prices dropped 10 cents in a matter of days, according to Burnt Store resident Jerry Luyk. On Thursday, Luyk said the price was $3 a gallon at both stations.

"It was $3.09 (9/10) the day before yesterday," Luyk said.

Luyk said the prices at those two stations are usually 10 to 20 cents higher than those at other stations he visits.

"They've been that way since Hurricane Charley," Luyk said. "You can go over the bridge to Fort Myers and get it a lot cheaper."

The statewide average for a gallon of regular gasoline Thursday was $3, according to AAA. The national average was $2.94 Thursday.

The 761 Grocery, at 9836 S.W. County Road 761 in south DeSoto County, near Fort Ogden, is open from 6 a.m. to 8 p.m. The gas station can be reached at (863) 494-3446. To contact Randol Realty, call (941) 629-1814.

Business Editor Dan Mearns contributed to this story.

-----

To see more of the The Sun -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.sun-herald.com.

Copyright (c) 2005, The Sun, Port Charlotte, Fla.

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: Sun Herald

More News in this Category