Fuel Retailers' Message to President: Look in the Mirror
First, it was Putin. Then, Big Oil. Now, he's blaming fuel retailers for high gas prices.
"He," of course, is President Biden whose recent message to gas station owners was "bring down the prices you are charging at the pump to reflect the cost you're paying for the product."
Does he even believe his own words? Doesn't he have one aide who can enlighten him on how gas prices work?
For more than a decade, Convenience Store News has been reporting on how convenience and petroleum retailers have been shifting their focus to higher margin in-store products, especially fresh food offerings, to offset the continuing decline in profits they earn from motor fuels and cigarettes. As pump prices climb, that profit margin on fuel gets even smaller. High gas prices actually hurt convenience store retailers because consumers will make fewer trips to fill their tanks and spend less inside the store.
Retailers I've spoken with don't understand why Biden is attacking gas stations, two-thirds of which are owned or run by an entrepreneur or family who operates a single store. Many of them are ethnic minorities trying to achieve the American Dream. Big Oil, Biden's other boogeyman, owns less than 5 percent of all the gas stations in the country.
Jeff Bezos, no right-wing conservative, called Biden's attack on gas stations as "either straight ahead misdirection or a deep misunderstanding of basic market dynamics."
Putting politics aside, convenience/petroleum retailers should look for ways to help struggling consumers. U.S. households are now spending the equivalent of $5,000 a year on gasoline, up from $2,800 a year ago, according to Yardeni Research.
Altoona, Pa.-based Sheetz Inc. recently dropped its prices at the pump on Unleaded 88 and E85 for a limited time through July 4 to help drivers save money. Retailers can use their loyalty programs to reward frequent customers with cents off a gallon of fuel — several are already doing so. And I'm sure we'll see other promotions that tie in-store purchases into discounts on gas.
As I write this, fuel prices appear to be moderating slightly. The Fed's move to increase interest rates also appears to be slowing inflation, which is good as long as it doesn't trigger another housing crash or recession. The convenience store industry has weathered worse times than this.
There are many reasons behind the sharp rise in fuel prices. Biden should look at his own anti-petroleum policies for contributing to today's gas price hike. Don't make convenience stores your scapegoat, Mr. President.