Gas Station Profit Margin Gas Pump Gasoline Price

http://www.begbucks.com Hello Youtube, Are you wondering if the gas filling station down the street is charging market value? Well if so; I made this a short video to inform you how gas pricing works To determine the avg. gasoline price in your area what you need to do go to CNBC TV market watch (basically ticker tape TV that shows the REFINED Gas price (this figure includes federal taxes at 18.4 cents per gallon & the refiner margin typically at .30-35 cents a gallon avg.) as well as the other prices of other commodities like Light Sweet Crude, Metals like gold, silver, copper & platinum, Food futures like corn, soy FCOJ & so on

To obtain the avg. gas price, add the cost you see usually the upper (but used to be lower) part of the screen & refreshes every 60 sec. or so happens to be $1.9941 cents a gallon wholesale, now add your state gas tax (you can goggle for this info) which in my state of mass is 23.5 cents a gallon
(Pause)

followed by a flat 23 cent per gallon profit margin (why 23 cents you ask, well it's because the national avg. (though I find it adhered more to by those stations that have a quickie mart, sell cigarettes, snacks, lottery, and so forth, as the logic behind is that should the margin increase even slightly by a few cents for instance, the odds of you purchasing something else besides gas drops significantly & ends up costing that filling station owner money in the process. although some of the smaller privately owned, non-franchised stations, stations that don't have an interest in offering saleable items besides gas, as well as those in rural areas or in high overhead/inaccessible locations (such as we have here on Marthas Vineyard or Nantucket) may price their product accordingly as they see fit.

so as a recap
Wholesale price (usually in the upper right corner of the of your screen, just a few rotations after crude oil (as it comes out of the earth), which is followed by Light Sweet Brent Crude, Natural Gas & usually (GAS) THAT;s THE ONE YOU WANT TO CHECK

Now add your state gas tax (once again you can goggle it)

& now add the .23 cent margin per gallon (this is a flat price weather the retail price is $1.5 or $4.5 & stays constant) HOWEVER PLEASE UNDERSTAND THAT IN MY EXPERIENCE STATIONS HAVE TO SELL THE GAS THEY HAVE ORIGINALLY OBTAINED AT WHATEVER PRICE THEY DID - FIRST & TYPICALLY CANT DROP (BUT SOME MAY RAISE) UNTIL THEY RESUPPLY AGAIN

Finally please keep in mind that in my experience the prices that you see wholesale on CNBC will result in an avg. price at the pump in about 10 days (as this typically is the market trickle thru timeframe)

I hope that this helps you out & please subscribe (& so will I), comment or rate, thanks!




some notes:

Price up Arrow Green, Price down Arrow Red.

Dow stats rotate only when market is open for trading.

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[maddielubeski]

You cant put a margin on independant gas station margins. Number 1 a gas station buys the gas from a wholsaler. They then have to have a comparable price to the next gas station down the street. Credit cards cost roughly 4% of the price, and then they have to pay rent, property tax, and employees. The margin fluctuates day to day depending on the time of the delivery, the spot market going forward. Your point is good if someone is wondering why gas station prices are different than what yo

[Begbucks]

@maddielubeski But the 23 cents is the national avg. which I might add in minimal when compared to other products

[maddielubeski]

Huh

[Begbucks]

@maddielubeski ?

[Sneakey]

you forgot

$.15 /gal distrobution cost

$.33 /gal refinery cost (refinery profit)

$.08 /gal local sales tax

$.35 /gal state excise tax

$.18 /gal federal excise tax

$.08 /gal credit & debit card fees

$.02 /gal state underground storage tank fee

(most of these numbers fluctuate daily)

[Begbucks]

@Sneakey Hmm. that amounts to $1.19 a far cry from $4 & not the station's margin, merely fluff added to the total cost, not to mention;

wholesale skimming by the IMF which is about 35% of the Middle Market (Source: Lindsay Williams)

But the poor saps pumping still make out less than quarter in most instances.

[Begbucks]

@ParaseveCPA The point that I was trying to make was in that gas station profit margin tends to be fixed atleast by the national chains at .23 per gallon not allowing a higher or lower margin.

[ParaseveCPA]

How do you calculate profit margin based on the price you bought and sold? If you use profit margin per gallon why not use straight what you bought in dollars vs want you sold in dollars?

thanks

[Begbucks]

@aakashpatel1982 thats the national avg. for stations that have a quickie mart such as Mobil Gas or Shell not your independent filling station where margins can be greater