7) It Didn’t Have to Happen

Too Late for Sinclair Retail (excerpt)…
struggles with refining and retail gasoline margins
have pinched the company tight enough to where they decided to
sell the retail division.
“Their intent is to sell it to their jobbers or distributors,” said one Sinclair employee who requested anonymity.
Larry Rogers, general manager of retail marketing, acknowledged to CSP Daily News that the company intends to sell the 90 stores, but chose not to offer details, pending approval by upper management and the ownership.
John Hill, executive director of the Utah Petroleum Marketers and Retailers Association, hadn’t heard about the sale yesterday morning but chalked it up to another oil company realizing retail isn’t the place to make money in this industry.

It may be too late for Sinclair, but not too late for you. Control your fuel margins (see Post #6 and earlier). Don’t let the market control them, or your future.

More of the same here: Susser Holdings Net Income Cut by Two-Thirds … companywide gross profit totaled $107.8 million, down 4.2%, primarily reflecting lower fuel margins.

5) The Truth About Margins

On July 24, 2009, ABC’s 20/20 aired a special program titled “Over a Barrel: The Truth About Oil“.  You may download and watch the segment of the program dealing with gasoline stations and margins here or here.

In the context of retail gasoline margins, some notable quotes from the program:

“The average retailer makes 10 cents or less on a gallon of gasoline. There’s a better profit margin in convenience stores.”  Sal, station owner

“That corner gasoline station has never been able to make a profit on gasoline.”  Sal, station owner

“Intense competition among local gas stations is what keeps profit margins on gasoline low.  After all, people will drive miles just to save a couple of pennies a gallon.”  Charles Gibson, ABC News

“It is time for smart, entrepreneurial, and customer-friendly retailers to utilize the tools available to them (see Posts 2 & 3 below) to improve their profit margins on gasoline and diesel fuel while saving people more than a couple of pennies a gallon“  Tom Langan, WTL Trading