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Independent Gas Stations Not Cashing in on High Prices

Independent Gas Stations Not Cashing in on High Prices



Estimated read time: 2-3 minutes

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SALT LAKE CITY (AP) -- As gas prices rise, independent service station owners profit -- at least, that's what consumers believe.

But Cameron Egan, owner of the Corner 22 station and convenience store in Bountiful, says he and the other independents in Utah are as unhappy about the cost of gasoline these days as the hordes of disgruntled motorists who object to the high prices.

When it comes to gasoline, filling station owners say they are getting far more complaints than profits from the rising prices.

"The reality is there is very little money to be made selling gas at the retail level," Egan said.

Service station owners, whether they operate large numbers of locations or single stores, feel lucky if they can make three or four cents a gallon. Their profit usually doesn't change even if the price goes from $1 to $2 a gallon.

Competition makes it difficult for locally owned gas stations and convenience stores to pass price increases on to consumers, said John Hill, director of the Utah Petroleum Marketers & Retailers Association.

"Unlike most products, the price is posted right out there for everyone to see, and for a lot of people it is nothing for them to drive five miles out of their way to try and save a cent or two on a gallon of gas," he said.

If station owners want to maintain any kind of volume at all, they must try to hold the line on prices -- an increasingly difficult proposition with the emergence of new competitors such as grocery stores and membership warehouses that willingly use gasoline as a loss leader to attract new business and help keep their customer base.

"Right now, we've got a competitor right around the corner who is selling gas for cheaper than we can buy it," said Lynn Child, who along with his father Urbane operates Child's Automotive in Salt Lake City.

Child actually considers himself lucky. He and his father operate four service bays at their filling station and rely more on making money from automobile repairs than the sale of gasoline.

Egan, however, counts on gasoline sales -- he sells 2,000 to 3,000 gallons per day -- to generate about 80 percent of his daily profits. The rest comes from the sale of convenience store items.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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