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What $3.50 a gallon of gas buys

Posted March 25, 2011

— Drivers paid $3.46 for a gallon of regular, unleaded gas at a Marathon station on Lake Wheeler Road Friday morning.

If you think store owner Steve Byers is getting rich, think again.

"A couple weeks ago, I sold $40,000 worth of gas and made about $140," Byers said.

So where does all of that money go?

In February, about 80 percent went to the cost of buying oil and refining it, according to the federal government.

State-by-state gas tax rates

Another 14 percent covers federal and state taxes. North Carolinians currently pay 32.5 cents of state tax on a gallon of gas, plus the federal tax of 18.4 cents per gallon. The state adjusts that rate every six months based on the price of wholesale gas. North Carolina's total gas tax of 51.2 cents per gallon is slightly higher than the national average of 48.1 cents per gallon.

Add a few more cents to transport it, and that's what the retailer is paying when the shipment arrives.

After Byers receives a shipment of gasoline, his supplier sends him a fax telling him how much it costs. Byers adds only a tiny profit margin.

"Depending on what my competition is, I'll mark it up a few cents," Byers said.

Gas retailers like Byers are always thinking of how to pay for the next shipment.

The big retailers get wholesale price updates twice a day, and if crude oil costs jump in the morning, "it will be reflected in the price that comes in that afternoon," said Gary Harris, with the North Carolina Petroleum and Convenience Marketers Association.

"That's how much this shifts, and that's the value of the product at the time," he continued.

Rising gas prices What $3.50 a gallon of gas buys

Byers said his 1 percent profit margin on a gallon is a best-case scenario.

"If you use a credit card, then the credit card company is going to charge you 3.5 percent, so I lose money," he said.

Selling gas is a tough business, with cut-throat competition, Byers said.

"It's really a loss leader. Nobody's making money off gas," he said.

39 Comments

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  • cunhell29 Mar 31, 10:11 a.m.

    Just got back from a round trip driving to Utah. Gas prices are about the same across the country. The best I found was $3.00 dollars coming back Through Texas.I agree the state of North Carolina would tax the air you breath if they could. This is the only state that i have lived in that taxes just about everything. This is at at all level of gov.,state and local.The problem is the voters of the state have let the elected leaders get away with passing new tax laws. With A Quick check i found this state has had more elected represenatives charged with crimes than most other states. One would think special interest is running the state, "JUST SAYING"

  • Mugu Mar 30, 3:27 p.m.

    Why is gas so expensive in NC anyways? It is notably cheaper everywhere else in the Southeast.

  • Mugu Mar 30, 3:26 p.m.

    It is sad that the everyone makes money off the gas except for the person selling it... even the government is raking in more in a month than the retailer makes all year.

    Something is wrong with the system.

  • 6079 SMITH W Mar 25, 7:33 p.m.

    Yeah, I just knew somebody would like "Omnipotentitiousness"(TM) (it's mine, I made it up)..... I say, hopefully without refudiation, that making up words is all the rage these days, $arah and Shakespeare do it, gotta celebrate it! ;)

  • Serious man 4 Mar 25, 7:20 p.m.

    Cary Oil Company makes $0.04 per gallon sold at its' suppliers. Compare that to other local distributors. It is higher.

  • tttaylor Mar 25, 6:31 p.m.

    really geosol?!? if this economy wasnt in such bad shape maybe some of those things you mentioned would work...Its hard to sale a house that has lost market value then turn around and by something already over priced somewhere else. The same house in johnston county is less expensive as the same one in wake. If its soooo easy to just ignore the gas price and lose money in all other areas of our life....let me get some of your money. Fix the gas prices...better yet fix OUR OWN COUNTRY and quit messing with all the other countries. We have problems here that need attention or else our country will one day be just like the ones we are bombing and are at war with! I havent seen the first oil rig off our coast yet...wait before you say "well look what happend with BP in the Gulf"....Look what happens to people who smoke, drink and drive, but yet we still have those around produced right here in our very own state.

  • NCMacMan Mar 25, 6:25 p.m.

    If any retailer is paying 3.5% for credit card processing, they really need to find a new merchant processing service.

  • jungleflu Mar 25, 6:06 p.m.

    most of the money goes to the cost of buying oil and refining it
    mostly from OPEC !!!!!!!!!
    HMMMMM
    Well i know for a fact that about 80 percent oil we make in the U.S. gets sent over sea's (China, India, Australia)!
    A gallon of gas in India goes for around 8 dollars a gallon!!!
    HMMMMM
    Kuwait ( a part of OPEC) sales gas in its own country for around 0.60 cents a gallon!!!! The U.S. D.O.D thought that paying 0.24 cents a gallon was too much for the gas the base's use in Kuwait. All the Vehicles on base's were at a stand still for almost two weeksBefore the U.S. government decided to pay 0.24 cents a gallon!!!!! HMMMMM We built and funded the Alaskin Pipe line so we wouln't have to buy oil from OPEC or any one else!!! This all might seem like a rant but these are facts the the American public needs to know just look it up

    Why DO WE NOT USE OUR OWN OIL HERE It Might Cost Less !!!!!!!!!!!!!!!!!!!!!!!! HMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM

  • tommys5 Mar 25, 5:54 p.m.

    309 in virgina
    woodrowboyd2

    When 30 days ago? And it is snowing in Selma.

  • woodrowboyd2 Mar 25, 5:52 p.m.

    WE are being had by this state.
    Our own president while on vacation told a group to drill off shore and we would be their 1st customer.
    Dayum why cant we drill here we have oil and natural gas.

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