When the news doesn’t talk about the presidential election, it talks about the price of gasoline. I think it is important to understand how gasoline gets to $3/gallon and what that means for you.
The largest misconception of the petroleum industry is that it is dominated by Big Oil. But ExxonMobil, Shell, Texaco, etc. operate less than 5 percent of retail gasoline stations. They realized it is more profitable to sell or lease those assets to the people who live in your neighborhood. My organziation operates a program called Neighbors Serving Neighbors to remind and educate the community that they are buying gasoline from people in the neighborhood and not Big Oil. The employees are not employed by the brand.
There are several pressures on retailers that can drive the price up. When you purchase a gallon of gasoline with a credit card, the credit card company makes 2% on the transaction, that is 6 cents/gallon at $3 gasoline, almost more than double what the convenience store owner makes on a per gallon basis.
The federal government has not made it easier to sell gasoline either. From regional blends to confusing compliance requirements, various federal agencies and departments contribute to raising the cost of business. For example the EPA requires special equipment at the pump to prevent ground-level ozone.
To learn more about what contributes to rising gasoline prices and what that means for you, I am scheduled to speak to the Wednesday Republican Breakfast Club, Jan. 30 at 7:30am at the Eastport Yacht Club.