Encino Gas Station Owner Laments Dwindling Profits, ‘Angry’ Public

LOS ANGELES (CBS) — If the recent surge in gas prices is killing your budget, imagine what business must be like for those who are trying to sell the stuff.

Andre Van der Valk, who operates four local gas stations including a Shell station at the corner of Ventura Boulevard and Lindley Avenue in Encino, told KNX 1070 NEWSRADIO he has seen his profits dwindle as prices continue to climb increasingly higher.

“Just the credit card fees on that transaction is 15 cents a gallon,” said Van der Valk. “So when you get an increase of 25 cent this week, plus another 15 cents on top of that, there’s an additional at least 6 cents a gallon in credit card fees, you’re looking just this week alone at 30 cent increases.”

Drivers on Friday saw the average price for a gallon of gas in the L.A.-Long Beach area spike to $4.25 a gallon — up six cents from Thursday and 25 cents from a week ago.

And while the prices push costs higher for operators like Van der Valk, he said somebody’s always looking for a cheaper price.

“There’s competition out there, and we’re all striving for that same gallon of gasoline that the consumer is buying less of in this day and age,” he said.

Van der Valk said many operators have seen their profit margins dip from around 15 cents a gallon to 10 cents a gallon or more.

While some analysts have pointed to the tumbling value of the U.S. dollar as a major factor behind the recent surge in gas prices, Van der Valk pointed to the often-competing agendas of oil and gas companies, refineries, and Wall Street speculators.

“You’ve got those three components working right now, and that’s why you’re seeing something that has no reason,” he said.

Between the shrinking profits, a volatile geopolitical climate and an unsympathetic consumer perception, Van der Valk said it’s a “lousy time” to be in the gas business.

“You’ve got a public that’s buying less, and a public that’s quite frankly angry,” he said.

  • osiris1964

    conserve..ride a bike..

    • randy

      Osiris1964…cool screen name!

  • Kevin B.

    How far away are we from seriously considering nationalizing the oil and gas industry where prices can be set by an independent body or the government?

  • bounce

    Am I missing something? The credit card processing fee is a percentage of the price per gallon / total sale. Yes, the amount paid to the credit card processor goes up, but as long as the fee percentage doesn’t go up, it doesn’t affect his profit.

  • Understanding Consumer

    Yes, the credit card processing fee is a percentage of the price per gallon. So the higher the price the more it cost per gallon to process credit cards. And if the margin does not increase to cover those costs, the gas station operator loses money. They are still selling the same gallons, but the credit card fees go up.

  • James Baganov

    Shell sas station on Ventura Blvd. & Lindley has been closed for over a year.

  • http://propertycloud.co.za/2012/02/encino-gas-station-owner-laments-dwindling-profits-angry-public/ Encino Gas Station Owner Laments Dwindling Profits, ‘Angry’ Public - Property Cloud

    […] Read the full story and more. […]

blog comments powered by Disqus
Sandwich Generation

Listen Live