Clyde’s Market chain co-owner Greg Woolard said store location, wholesale gas prices, credit-card fees and gasoline taxes determine whether he loses money, breaks even or makes a profit on gas sales at his family-owned company’s convenience stores.
“It’s a very competitive market,” said Woolard, whose 43-year-old company is headquartered in Glennville. “Typically, in rural areas the gas will stay in the ground a lot longer than it will in town. If I can’t get that gas out of the ground in three days, I can lose money.”
Woolard explained that the longer the gas sits in the underground storage tanks at a station, the greater the likelihood of a price change. He said this is part of the reason gas prices are higher at stations located in isolated rural areas.
Last week, the Coastal Courier evaluated gas prices along Highway 84 from its intersection with I-95 in Midway through Hinesville to its intersection with Airport Road in Walthourville. The price variance was as much as 40 cents per gallon, with the highest prices found in outlying areas.
The price variance between Clyde’s Market stores was only 20 cents per gallon. The highest price at Clyde’s was found in Midway at $3.459, and the lowest price at Clyde’s was in Hinesville at $3.259.
“Typically, petroleum prices drop back in the fall anyway,” he said, agreeing with one of his store managers, Denise Smith, who told the Courier last week she has seen a pattern of dropping gas prices in recent weeks. “One thing you can count on is if anybody tells you he knows what the price of gas is going to be, he’s lying.”
Woolard said about 18 months ago, a representative with one of the large oil companies predicted the price of gas would go above $5 per gallon. With the exception of gas prices in California, he said that simply has not happened.
He said oil refineries in the Northeast that were affected by Superstorm Sandy would have little if any affect on gas prices here.
“Most of our gas comes from refineries in the Gulf,” he said. “When (Hurricane) Katrina hit, the Northeast wasn’t affected, but we were. We got a 7 cent per-gallon jump in prices the day of the storm then it came back down (by) 3 cents per gallon.”
Woolard said he watches daily the price of oil and the subsequent rise and fall of gas prices. He said the price at his stores’ pumps is driven by what he sees. Hinesville has been enjoying relatively low prices lately, he said, noting that he has had very small profits in gas in this area in recent weeks.
He said the culprit hurting his profits most are the fees charged for credit- and debit-card transactions. Although the fees charged for debit-card transactions are what he called “marginally less” than credit-card fees, he has to set fuel prices to account for these fees.
Woolard said small companies like Clyde’s pay hundreds of thousands of dollars a year in credit-card fees. These costs are second only to his payroll costs, he said.
In order to remain competitive, only so many of these fees can be passed on to the customer at the pump, he said. He added that that’s why many stores offer a discount for cash-paying customers or “club” cards where the customers essentially buy gas in advance by starting a debit card through that store.
Woolard said another source affecting the price of gas at the pump is taxes. He said one reason the price of gas is less in South Carolina is that its gas tax essentially is a set amount per gallon.
In Georgia, it’s both a set amount per gallon, plus a sales tax that’s a percentage of the sale.
According to GeorgiaGasPrices.com, the tax rate for gas in Georgia is 7.5 cents per gallon plus a 4 percent sales tax. According to an Associated Press article in on the Athens Banner-Herald’s website, Gov. Nathan Deal on June 9 ordered a freeze to an automatic increase of the tax rate to 8 cents per gallon.
The AP article said the gas-tax rate will stay the same through the end of the year unless the price of gas goes up or down by more than 25 percent.