Friday, June 20, 2008

Victims of the Pump

Oil may very well turn out to be the worst substance on the face of the earth, making even the most, mild mannered man become a warmongering whore, not unlike how red kryptonite turns the Man of Steel into…the Evil Man of Steel?

“You always wanted to fly Kent, now’s your chance.”

We have fought wars, conquered nations and sold out our mothers, all in the name of oil. And there seems to be no end in sight (the end of our dependence on oil, not “the end” – as that is December 29th, 2012).

The current oil crisis has now seen gas prices hit an all time high.

(Prices based on the ever shrinking US Dollar)

Belgium 9.02
France 8.75
Germany 8.88
Italy 8.93
Netherlands 9.85
UK 8.76
US 4.31

And things are about to get worse. Some Gas Stations are now doing away with customer use of a credit card…which inconvenient if not down right illegal.

CHARLESTON, W.Va. - When gas station manager Roger Randolph realized it was costing him money each time someone filled up with $4-a-gallon gas, he hung a sign on his pumps: "No more credit cards."
He may be the first in West Virginia to ban plastic, but gas station operators nationwide are reporting similar woes as higher prices translate into higher credit card fees the managers must pay, squeezing profits at the pump."
The more they buy, the more we lose," said Randolph, who manages Mr. Ed's Chevron in St. Albans. "Gas prices go up, and our profits go down."

Is it wise to turn all gas stations, across a country that is suffering through financial hardship, into a strictly “cash business?” Aren’t gas stations/convenient store already a prime “stick up” joint for a fellow down on his luck and short this month’s rent?

My initial thought, upon hearing this, is to hate the gas companies even more (if that’s possible). But it’s the small gas station managers that are suffering, and at the hands of the credit card companies.

All retailers pay what’s called an interchange fee, a percentage of the sale price paid to credit card companies on every transaction. The percentage the retailer pays is a fixed rate, typically under 2 percent, but as the price of the goods or services increases the dollar amount of the fee increases.

Simply put, when you are buying a candy bar or a yacht the credit card company gets 2% of the sale. Not a big deal when you are talking about .01% for the “Twix,” a really big deal when you consider its $2400 for the boat. And the same amount of paper is being pushed around on each transaction.

The report goes on to say:

As gas tops $4 a gallon, that pushes fees toward 10 cents a gallon. Now stations, which typically mark up gasoline by 11 to 12 cents a gallon, are seeing profits shrink or even reverse.In a good month, Randolph's small operation would yield a $60 profit on gasoline sales. But that's been buried as soaring prices forced the station to pay about $500 a month in interchange fees.

This is infuriating! Sure I want gas cheaper, but not at the expense of the Roger Randolph’s of the world…after all, he’s not the one calling me every night during dinner. The Visa rep however…

The credit card companies say fees are just part of the cost of doing business.
MasterCard at least has made a small gesture in trying to help the small businesses. They have put a cap on interchange fees for gas purchases of $50 or more, said company spokeswoman Sharon Gamsin. This helps the small gas station owner when one is filling up their yacht, not so much with their Subaru.
Visa argues that the fees are offset "by the tangible benefits to stations and their customer’s, such as the ability to pay at the pump.” I do admit I am an addict to pay at the pump. It’s my right as an American to not have to talk to another human being. Although it’s through our society’s lack of communication that we find ourselves mired in some of these problems.

In a last ditch effort to try and help their customer’s while continuing to make a profit, many gas stations have started offers incentives for customer’s using cash. Some offer any where from 4-10 cents off the price of gas. Doesn’t sound like much? Well think of this…would you go to the gas station down the street at 3.99 a gallon, or the one in front of you at 4.09? You know the answer.

As the price per barrel of oil increases at a horrifically historic rate, and gas prices at the pump do the same, there is more and more talk of drilling in remote places that have an even more remote chance of actually having oil. It’s time for real efforts towards eliminating our dependence on any oil, foreign or otherwise. There are real efforts being made to help reduce fuel usage thus decreasing cost and environmental dangers.

We need help!

When gas prices are likely up to about 5-6 bucks a gallon this November, think of Roger Randolph. Think of Mastercard. Think of Visa. Think of the Oil Companies. This of the yacht you’ll never be able to afford, and the candy bar life style many of us have been forced to accept. Think of how much money you just put into you gas tank to get across town to your local voting station. Think of which one of these candidates will take on the kryptonite of “big business.”

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