A Gas Retailer’s Perspective

I received this email that I thought I would share. 

I’ve written to you a couple of times in the past regarding the irrelevancy of the minimum markup law on gasoline. I had to write this morning after you again brought up the law just a few minutes ago.

I am a gasoline retailer and own a fairly heavy volume convenience store northwest of Green Bay. These are my ACTUAL margins on all grades of gasoline for the month of July:

Regular - 2.67%
Mid-grade - 3.09%
Premium - 3.16%
Off-Road Diesel - 9.88%
Diesel - 2.72%
TOTAL - 2.99%

These are my ACTUAL margins year-to-date:

Regular - 4.34%
Mid-grade - 5.07%
Premium - 4.65%
Off-Road Diesel - 11.52%
Diesel - 4.11%
TOTAL - 4.61%

As you can see, my actual margins are much less than required by the minimum markup law. When you take into account credit card fees, which vary from store to store but average about 2.0% of sales, my profit margin for July gasoline sales is closer to 1%! One stinkin’ percent!! That’s 4 cents on a $4 gallon. The state of Wisconsin makes 31 cents a gallon and the federal government makes 18 cents a gallon and they’re not here working seven days a week.

My point is the minimum markup law is irrelevant. It is much like the speed limit. The law is on the books but it is ignored and not enforced for the most part, especially when gasoline is $4 a gallon. We should be focusing on putting more pressure on politicians whose policies have given us $4 a gallon gas and having them change those policies. As you can see from the above numbers, the minimum markup law is not inflating the street price at all.

Keep the minimum markup law on the books or repeal it, as a gasoline retailer it means nothing to me.

Regards,

Jeff from Green Bay