Drivers force independent gas station to lose thousands
As you may or may not know, last night a Citgo station in Kentwood (52nd and Kalamazoo) was priced at $3.87 on the street. However, once at the pump, customers noticed the $2.87 and greedily filled up without saying one word to the station’s employees.
It is appalling to me that this went on for nearly four hours while the station owner (NOT BIG OIL) lost thousands of dollars.
For those who don’t know, the station owner paid Big Oil $3.65 per gallon for the gasoline and WILL STAND TO LOSE the difference between the $2.87 and $3.89.
It is frustrating that every single one of the idiots who paid $2.87 lacked the ethics to tell the station employees what was going on.
I guess I can understand how other countries view us, heck, even I understand.
And back to the basis: BIG OIL STILL WON, SMALL INDEPENDENT RETAILER LOST.
Patrick
Friday 09 May 2008 | Patrick | Commentary
3 Responses to “Drivers force independent gas station to lose thousands”
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Hey Patrick,
You think a $1 price per gallon difference is a big goof? Check out this video at the following link:
http://www.youtube.com/watch?v=CdbIZZwGts4
This was an actual news story reported about a month ago from Wilmington, NC. Some station operator put premium gasoline at 35 cents per gallon instead of $3.35. A $3 per gallon discount.
Patrick………
The bad deal about this is that Citgo is owned by Venezuela (Hugo Chavez). After what he has done, and is doing, no one should be buying that gas anyway. Yes, it is hard on the independent dealer; but the news report showed the people inside as a little less than intelligent/not on top of things, apparently.
TWO MISTAKES:
#1 Dealing in products from Venezuela, the leader of which professes hate for us and is apparently supporting local terrorism down there. Knowledgeable Americans will/should not purchase/support such a regime. I suspect that many Americans don’t know Venezuela owns Citgo……
#2 The attendant did not seem to be too on top of things in the TV interview: For this situation to go on for 4 hours (duh). Management/ownership is responsible for the quality of employees; and the price settings. In this case, they pay the price for what is, unfortunately, a certain level of stupidity……..Apparently, stupidity is (as it should be) painful!!
That is a pretty simple mistake for someone to make, I catch myself all the time say 2 instead of 3 when I’m talking about prices. Very few people go out and check the pumps after they change the price.
I’m shocked that they went that long without anyone pointing it out. We’ve had it happen twice at our stores this year and each time the first customer pointed it out. It is also nice that the reporter let it go on for so long before letting them know, just so they could get a good story. I would guess that the station lost $5,000 - $6,000 in those 4 hours.
j m wolobo:
You are right about Venezuela owning Citgo, but that doesn’t mean that Citgo owns the station. Nationwide the Oil Companies own less than 3% of the gas stations, and 75% are owned by families that own one station.
Think of Citgo, Marathon, BP, Shell, etc as a franchise like McDonalds; the station just buy gas from them and pays to use their name. Most supply contracts with the oil companies are for 7-10 years. So, there is a pretty good chance that the station was branded as Citgo way before anyone heard of Chavez. It is VERY exspensive to buy yourself out of a contract, plus you have to spend a lot to change brands. So, I doubt they could afford get away from Citgo if they wanted to.
Also, it is completly impossible for the US to stop using gas from Citgo / crude from Venezula. The 3 Citgo refineries produce about 13.5 million gallons of gas per day and there is no way to replace those gallons. If Citgo closed all 3 refineries today, it would cause a major shortage and you would see gas over $6 within a week. It would take about 7 years to build new refineries to replace them.
It is also impossible to boycott Citgo gas, because they are going to sell all 13.5 million gallons everyday and most of it won’t go to Citgo stations. You have no way of knowing where stations like Meijer, Admiral, Wesco, Wal-Mart, Sam’s Club, Costco, etc bought their gas from (most likely, whoever is cheaper that day). Plus, all the oil companies exchange gas with each other whereever and whenever they need it.
The ironic truth is that Venezula needs us just as much as we need them. Their crude is what is called “heavy sour” and is a lot harder to refine than the “light sweet” crude from the middle east. Most refineries can’t handle it, so their best option is to use the Citgo refineries in the US. It is possible for them to refine gas in the US and ship it to other countries, but it would waste a lot of money.