Yesterday’s Gas Price Hike

Gasoline prices jumped 20 cents yesterday to $3.45.  While this was not a record high for Fort Wayne, it was a huge jump in one day.  The jump coupled with news that crude oil prices had still not settled and could go even higher led to lines at some stations, while others like the Lassus BP at Spy Run and Tennessee Avenues was empty.  The highest record in Fort Wayne was $3.59 set on May 22, 2007. 

The higher price at the Lassus Handy Dandy at Spy Run and Tennessee Avenue

The Kroger Gas Station at the corner of Spy Run Avenue and State Street almost always waits to do their reset after they have closed.

The lines at Kroger to save 20 cents a gallon

This practice is beneficial to consumers in the area.  But, it raises one of those issues that leads consumers to gripe and grumple about paying higher gas prices.  Gas stations are not hooked up to a pipeline that delivers gasoline on demand as consumers pump it.  Instead, they receive shipments frequently to replenish their storage tanks.  The gasoline in the tanks yesterday had already been delivered and billed to the station at a lower price days before.  I can understand that it would probably be a nightmare to charge a price for gasoline in line with what the station was invoiced, but it seems like in today’s age with computer power galore, this should be a non-issue.  Kroger should be commended for this practice – something they’ve done for the last year or two.  The Circle K at State Street and Sherman Boulevard was also still at $3.25, but they were in the process of raising at 4:00 pm.  Down the street a block, the Speedway station was pretty steady as well, even with the higher price of $3.45.  I only needed a five or so gallons, so it didn’t seem smart to waste 20 minutes waiting in line at Kroger to save $2.00.

On News Channel 15, a story was aired about the rising gasoline prices.  They featured Dean Sakells who is an independent owner of the Marathon station at the corner of Clinton Street and St. Joe Center Road.  He stated, and a paper was shown listing these amounts, that his gasoline sales for January through December 2007 were at $1,944,937.46.  The top of the paper states: Profit and Loss January – December 2007.  Then further down, a Net Loss of $58,739.74.  Sakells stated that this loss was a result of the credit card companies charging their fees for processing cards tendered.  That loss is 3.02% of the gasoline sales which is oddly enough what I remember our company being charged per transaction by the CC processors (3%).  Anyway, if it’s a true net loss, is it for the business overall or just the gasoline portion.  When I hear net loss for a business, that usually means overall.  Something does not make sense here and should have been clarified.  The story also stated that according to Marathon headquarters, gas station owners only receive 1% of the cost of each gallon.  (Frankly, I’m tired of these station owners trying to get us on their side by saying it’s all the oil companies or credit card companies faults.  You dance with the devil . . . well, you know the rest.)

I know that the credit card processors make a killing in this business and it is unfair to business owners and ultimately consumers.  Most CC processors receive a base fee per transaction, plus a percentage of the transaction total.  Keep in mind that the transaction total includes taxes.  When you look at a $40, 50 or 60 dollar fill-up transaction, the CC processors stand to make a killing.  I could understand the high fees back in the day when everything was manual, but with computers today, how do you justify these exorbitant fees in this day and age?

Anyway, the entire system should be looked at.  Especially when in six months, we’ll hear that another round of record profits by gasoline refinery owners has been posted.

More photos from yesterday’s price hike


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