I don’t know about Virginia specifically, but the typical retail gas station in the US shows profit of about 1 cent to 5 cents per gallon on gasoline. Rarely they might make 10 cents, and also rarely they would take a loss on gasoline. Their greatest profit comes on things like bottled water, soda, packaged snacks, etc. on which the markup is often 100% or more.
Generally, they are probably pretty close to the US business average profit margin, which for the retail sector averages 2% to 5% (the reference cited says 2%, I’ve seen other retail averages somewhat higher). That means for every dollar of revenue (income), they have profit of 2 to 5 cents.
The very low profit margins of gasoline stations is why companies like Exxon have sold all their company-owned stations. Company-owned stations, because of higher overhead, would often operate at a loss, even with the mark-up on non-gasoline items. Gasoline sales amounts to a loss-leader in many cases, especially in states where percentage sales taxes apply to gasoline – as the price goes up, that percentage increases, leaving less and less for “profit”.
Credit card fees also used to climb with the price as they were usually 3% – that means on $1 per gallon gasoline, the company paid 3 cents to the credit card company. At $3 per gallon, they paid 9 cents – which would usually be more than their profit. Some credit card companies have changed this to a flat fee, which at least can help keep the store from taking a loss on gasoline, but I do not know to what extent that concept has been applied nationally.
Click here to cancel reply.
Sorry,At this time user registration is disabled. We will open registration soon!
Don't have an account? Click Here to Signup
© Copyright GreenAnswers.com LLC