Big Oil v Retailers

With Bill Frist introducing a Senate bill to stop price gouging, I think this is a pretty good time to educate people on exactly how gasoline is sold in this country. The Frist bill is only aimed at retailers, not wholesalers, and while the station you fill your tank at may be labeled BP, Citgo, Shell, or whatever, those companies rarely have any ownership stake in the station.

Most, in fact, nearly all, gas stations are independently owned and simply sign up with a particular brand of gas basically for advertising and to take part in that brand's credit cards. My family owns a gas station / mini-mart / stop and rob. We make approximately a nickle a gallon on the fuel we sell.

At three dollars a gallon, that's a profit margin of about 1-1/2%. Hardly gouging, and if you don't get the right deal with your supplier, the credit card fee eats that up itself. On top of that, without proper security measures such as pay in advance, drive aways make selling gas as a retailer a losing proposition.

Think about this, if a person puts thirty dollars worth of gas in their tank and doesn't pay, we have to sell six hundred gallons of gas just to get even. You have to understand, when you see those enormous big oil profits, they are not made by the retailers.

Now, I'm not going to say that isolated instances of gouging do not occur. I remember a few years ago, there were some and those people were promptly prosecuted under state laws already on the books by Betty Montgomery.

Bill Frist's bill does nothing to address the problem, and is simply political pandering.