Soaring costs are squeezing gas station owners too

Despite the jaw-dropping prices at the pump -- they jumped 19 cents a gallon in California to $4.43 in the last week and averaged more than $4 a gallon nationwide for the first time, the Energy Department said Monday -- service station owners aren't making the killing that motorists assume. That's because credit card fees, the price of tanker-loads of fuel and other costs are rising so rapidly that station owners haven't been able to keep pace despite the record prices they're charging. "People see $4 gas, and they think these retailers are making a fortune," said Ben Brockwell, a director at Oil Price Information Service, which tracks fuel prices. "The reality is these guys are being stressed to the limit." Gas station operators say the squeeze began years ago, as oil companies siphoned off more of the profits, took a cut of in-store sales and left owners to grapple with higher rents and equipment mandates. Now, higher oil prices are delivering another big blow -- to consumers and gasoline dealers. On Friday, oil futures exploded to a record $138.54 a barrel, up $10.75, the biggest one-day increase ever. Crude fell Monday by $4.19, or 3%, to $134.35 a barrel in reaction to comments by Treasury Secretary Henry M. Paulson Jr. that he wouldn't rule out intervening in currency markets to stabilize the dollar and to a call by Saudi Arabia for a meeting of oil-producing and -consuming nations to discuss crude prices."There is no good news for gasoline retailers," said Jeff Lenard, spokesman for the National Assn. of Convenience Stores, a trade group based in Alexandria, Va. Times have gotten so hard that some operators fear they'll have to close down. Some already have. Pennsylvania-based Uni-Marts, which owned or supplied 283 convenience stores and gas stations, filed for Chapter 11 Bankruptcy Court protection in late May, saying its cash reserves were drained by fuel costs. "The number of retailers on the brink of bankruptcy is now at a dangerous level," said Bill Douglass of Sherman, Texas, who owns 15 convenience stores and supplies fuel to 150 independent retailers. SOURCE:LATIMES.COM