Blaming the “messenger”

Gas station owners are evil, price-gouging thugs, right? After all, they raised prices in the middle of the day — charging more for what was already in their tanks!

Not so fast. Yes, some stations jump the gun a little on raising the prices. But they aren’t getting rich.

Gas stations typically make a few cents per gallon, at best, on gas. If you pay by credit or debit card, the merchant has to pay three or four percent.

As the manager of one station told me, “We’re probably selling it right at cost,” and if someone pays by credit card, “it’s like we’re paying them two cents a gallon to take it.”

Gas is a “loss leader,” meaning it doesn’t make money, but gets you into the store where hopefully you’ll spend a few bucks on snacks, beer, and other profit-making stuff.

What about those mid-day price jumps? I got the skinny from a station owner — the guy who actually writes the checks and buys the gas.

Every day at 6:00 the wholesalers set the price for the next day… sort of. They tell their retailers, and those retailers can place orders for the next day.

Chances are, especially now, those retailers are going to get a fill-up; there isn’t much left in their tanks overnight. But if they want gas at that 6:00 price, they have to move fast: Once the gasoline futures market opens at 10:00, prices start to fluctuate.

“Fluctuate,” ha. Let’s be frank: They start to go up.

A station that asks for a fill-up mid-day might find itself paying the higher price.

So station owners try to hedge their bets by checking the gas-futures market during the day to get a hint about those 6:00 prices. Some choose to raise prices mid-day to account for what they expect.

At noon today, gas was already at $3.17 wholesale, which means it will be at least $3.19 retail tomorrow.

That gas-station owner may not be your best friend right now, but maybe it’s some consolation that he’s not getting rich off you.

(FYI: Exxon-Mobil stock closed at $61.68 per share, up $1.78 on the day.)