Gas stations feeling the pinch, too

by Dustin Grove (grove@wsbt.com)

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Gas station owners say their profits are down amid increased competition, rising costs and heavy fees on credit card transactions. (WSBT photo)

By Tiffany Griffin

Story Created: Jul 9, 2008 at 10:18 AM EST

Story Updated: Jul 14, 2008 at 11:47 PM EST

SOUTH BEND — The average price of gas in Indiana hit a new record Wednesday morning at $4.15 a gallon. Believe it or not, gas station owners say they're now feeling the pain at the pump, too.

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“We used to make seven, eight, sometimes ten cents a gallon on gas,” said Ron Banicki, who owns Ron’s McKinley Marathon in South Bend. “It used to be enough to pay the rent and even some utilities, but that was eleven years ago. As time goes on, expenses go up, rent goes up, and the profitability of gas has come down.”

Today, Banicki says he makes three cents per gallon.

Lost profitability is only half of the pain at the pump for station owners. Some are even losing money on credit card sales because of the heavy fees.

Each time someone uses a credit card at the pump, the bank charges gas stations a fee of up to three percent.

“We have automotive service to offer, towing to offer, and we basically use that to subsidize our gas,” said Rick Ferrara, owner of Rick’s Phillips 66 at State Road 933 and Auten Road.

“It’s really an up and down business,” said Banicki. “And you have to be ready to stick it out.”

The number of retail gasoline outlets in the U.S. dropped by nearly two percent last year.

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