Gas prices have declined anywhere from 55% to 68% since September, so you may be thinking 'How are those gas stations to survive"?
Guess what...they make more money at $1.89 than at $4.29 per gallon according to a USA Today article.
Apparently profits rise as prices fall. As prices were on the rise, the gross profit margin dropped from 14 cents to about 9 cents on a gallon of gas purchased. Retailers couldn't pass on alot of their increases to consumers because of lack of demand. But with prices down, demand is up and margins are back to the norm for gas retailers. Sinking prices also pump up store sales for gas retailers that sell snacks, drinks and the like.
Well, it seems like everyone is happy when gas prices fall.
Thank you for making me Your Orange County Real Estate Connection.
Best regards.
Michael Caruso, Broker ABR ABRM CRB CRS GRI
2007 President, Orange County Association of Realtors
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