{"id":560711,"date":"2026-04-02T19:21:10","date_gmt":"2026-04-02T19:21:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/560711\/"},"modified":"2026-04-02T19:21:10","modified_gmt":"2026-04-02T19:21:10","slug":"a-gas-stations-markup-is-a-small-fraction-of-us-fuel-prices","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/560711\/","title":{"rendered":"A gas station’s markup is a small fraction of US fuel prices"},"content":{"rendered":"

DES MOINES, Iowa (AP) \u2014 The near-daily changes in U.S. gas prices are dizzying for drivers, who are left feeling frustrated and cash-strapped<\/a> by the highest fuel costs since 2022.<\/p>\n

With the Iran war<\/a> pushing up prices worldwide<\/a>, the U.S. average for a gallon of gas topped $4 on Tuesday<\/a>, according to AAA. The uncertainty at the pump is trickling down from a massive, volatile oil and gas market<\/a> that\u2019s making it hard for gas stations to keep up.<\/p>\n

Oil prices soared<\/a> when U.S. markets opened Thursday following President Donald Trump\u2019s speech Wednesday<\/a> promising to hit Iran \u201cextremely hard\u201d<\/a> in the coming weeks. He asked Americans for patience<\/a>.<\/p>\n

U.S. drivers have spent the past month gaming out when to fill up or hunting for deals as gas prices can change from one day to the next, or from one nearby station to another.<\/p>\n

Lonnie McQuirter, director of operations at 36 Lyn Refuel Station in south Minneapolis, said wholesale fuel prices are going up, sometimes multiple times a day, and are the main reason he\u2019s had to charge more for gas than a month ago. <\/p>\n

About a mile (1.6 kilometers) off Interstate 35, the neighborhood convenience store posted $3.399 a gallon for regular gas on Thursday, which is about 20 cents lower than the metro average, according to AAA.<\/p>\n

\u201cWe price based on what we\u2019re able to buy fuel at, and how well we can operate,\u201d McQuirter said. He declined to speculate about his competitors, saying, \u201cThey\u2019ve got different economics.\u201d<\/p>\n

McQuirter said his margins have gotten much tighter. He\u2019s also facing higher credit card fees and rising costs to maintain pumps. Still, in times like these, with consumers \u201cscreaming for help,\u201d McQuirter said small operators like him act on emotion more than greed. <\/p>\n

\u201cWe\u2019re in our stores every day looking our customers in the eye,\u201d he said. \u201cIt really takes a toll when people are having to cut back on certain things in order to afford to live.\u201d<\/p>\n

What factors into gas prices?<\/p>\n

A lot of it is outside the gas retailer\u2019s control. Roughly half the price at the pump pays for the cost of crude oil, the main ingredient in gasoline, according to the U.S. Energy Information Administration. About 20% goes to refiners who turn crude into gas.<\/p>\n

Those costs have risen as crude oil prices jumped in response to the war and shipping disruptions<\/a> in the Strait of Hormuz<\/a>. Gas retailers are adjusting the price at the pump to account for the higher price they just paid for their next shipment of gasoline.<\/p>\n

Taxes \u2014 federal, state and local<\/a> \u2014 account for nearly 20% of the price, while about 10% is left for retailers, who still have to pay for transportation, labor and other expenses.<\/p>\n

Retailers\u2019 markup has averaged about 38 cents a gallon over the past five years, according to the convenience store trade group NACS, citing data from research firm OPIS. After expenses, stations may keep roughly 15 cents per gallon, said Jeff Lenard, a vice president at NACS.<\/p>\n

\u201cSome make more, some make less,\u201d Lenard said.<\/p>\n

Patrick De Haan, head of petroleum analysis at GasBuddy, compared it to a homeowner\u2019s role in setting their sale price.<\/p>\n

\u201cIf I was selling a house today, I\u2019d be beholden to whatever the housing market is,\u201d De Haan said. \u201cThat\u2019s the same for gas station owners. Whatever the price of oil and gasoline are, they are a price taker, not maker.\u201d<\/p>\n

Why might prices differ from one gas station to the next?<\/p>\n

Although the national average just passed $4 a gallon, the price that drivers pay varies widely by state, city and station.<\/p>\n

Taxes alone can create large gaps. California\u2019s gas taxes and fees totaled about 71 cents per gallon last year, compared with roughly 9 cents in Alaska.<\/p>\n

Distance from refineries, the type of retailer, how much volume the location goes through and whether there are other fuel options nearby also play a role.<\/p>\n

Gas stations near competitors may choose to price gasoline competitively on large outdoor signs to attract drivers, hoping they\u2019ll come inside and buy higher-margin items, said Neal Walters, a partner focused on energy at the global management consulting firm Kearney.<\/p>\n

\u201cIt\u2019s one of the only retail locations where you don\u2019t have to go into the store to find out what you\u2019re paying,\u201d Walters said.<\/p>\n

Who benefits from rising prices?<\/p>\n

While U.S. retailers sell hundreds of millions of gallons of gas a day nationwide, they typically won\u2019t see large gains when prices rise.<\/p>\n

\u201cThe margins shrink when prices go up because it\u2019s harder for them to pass along the increases as quickly as they themselves get them,\u201d De Haan of GasBuddy said.<\/p>\n

When oil prices start to fall, retailers may recover some of those losses, particularly if there\u2019s uncertainty about future supply costs. Prices can rocket up but tend to drift down like a falling feather, said Garrett Golding, assistant vice president for energy programs at the Federal Reserve Bank of Dallas.<\/p>\n

Higher gas prices can also hurt sales inside the gas stations, if customers who are being squeezed at the pump spend less on other things. <\/p>\n

\u201cSo it\u2019s not always the case that higher prices mean the service station owners are actually doing better,\u201d Golding said.<\/p>\n

Most profits in the oil and gas supply chain are made upstream, he said, by companies that extract and refine crude oil. Still, Golding said they aren\u2019t necessarily celebrating; at some point, a significant spike in prices could hurt demand.<\/p>\n

\u201cIt may be a good stretch of days or weeks for them,\u201d he said, \u201cbut they\u2019re also cautious of what it could portend.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"DES MOINES, Iowa (AP) \u2014 The near-daily changes in U.S. gas prices are dizzying for drivers, who are…\n","protected":false},"author":2,"featured_media":560712,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[22758,28,12,69620,8877,248502,793,13015,13014,801,1570,228242,141152,149,248503,6429,6661,248501,139727,228730,20999,795],"class_list":{"0":"post-560711","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-american-automobile-association","9":"tag-business","10":"tag-donald-trump","11":"tag-energy-markets","12":"tag-federal-reserve-system","13":"tag-garrett-golding","14":"tag-general-news","15":"tag-ia-state-wire","16":"tag-iowa","17":"tag-iran","18":"tag-iran-government","19":"tag-iran-war","20":"tag-jeff-lenard","21":"tag-lifestyle","22":"tag-lonnie-mcquirter","23":"tag-minnesota","24":"tag-mn-state-wire","25":"tag-neal-walters","26":"tag-oil-and-gas-industry","27":"tag-patrick-de-haan","28":"tag-retail-and-wholesale","29":"tag-u-s-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/560711","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=560711"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/560711\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/560712"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=560711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=560711"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=560711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}