Pity the Man behind the Pump

Jay Fitzgerald writes in today’s Boston Herald that gas station owners are hurting despite the huge price increases we are seeing at the pumps.

“Huge rivals such as Wal-Mart and Stop & Shop that now sell gasoline at cheaper prices to draw customers into theirlarge stores. But the biggest current problem for gas-station owners is that the more prices rise at the pumps, the worse the cash flow is for station owners. Gas stations don’t charge motorists a percentage of pump prices to cover their costs. They usually charge from 5 cents to 12 cents a gallon.

But they still have to shell out tens of thousands of dollars up front each time a huge truck tanker pulls in to refill underground tanks at stations.

“The margin in this business is at its worst point in history,” said Paul O’Connell, executive director of the New England Service Station and Automotive Repair Association and owner of the Lunenburg Exxon station.

“It’s killing them,” said Paul Fiore, executive vice president of the Service Station Dealers of America and Allied Trades, referring to the multitude of pressures on small service-station owners.

The numbers bear that out.

Tens of thousands of service stations have closed in recent decades across the nation, industry figures show. According to the Massachusetts Standards Division, there were about 7,500 licensed fuel sellers in the state in 1995 – and today that number is about 6,500.”