TeeJaw Blog

Gas Station Price Sign From 1955

Posted in Government and Politics by TeeJaw on Monday, January 9, 2012, 9: 26 AM

This is the way price signs at all gas stations should read:

The retailer was making out a lot better in 1955 than today. The amount per gallon to the retailer is not much higher now than then, and 4 cents out of a total 20 cents per gallon is a 20% markup. That’s not profit because the retailer must pay its overhead out of that before realizing any profit. Even if the retail markup has doubled to 8 cents per gallon today, when the price is $3.00 the retailer’s share has declined to 2.6% per gallon. A retailer whose share of the total price tripled from 4 cents in 1995 to 12 cents today, and that would put that retailer on the high end of retail markup, would still only be getting 4% of the total price. The overhead for just the gasoline portion of the business could easily take all of that.

Gasoline is a loss leader today and that is why gas is sold almost exclusively at convenience stores. The profit from such a business is to be had from sales inside, not those outside. That’s why 1955-style gas stations no longer exist.

One thing is for sure. The government still gets the lion’s share of profit out of gasoline at any price level.


2 Responses

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  1. J.D. said, on Saturday, July 4, 2015, 10: 40 PM at 10:40 PM

    upon the birth of the auto industry most of the fule station’s had consumers paying nearly $20.oo a gallon four a corn based gasoline…. at that time most owners had deap pockets or wealthy backgrounds…. it’s has gone down in price really… Thank You…. love your blog… J.D

  2. TeeJaw said, on Saturday, July 4, 2015, 11: 47 PM at 11:47 PM

    Hi JD. Thanks for your comment. My blog has moved to htttp://teejaw.com. I hope you’ll visit there.

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