SALES

Retailers Pinched by Gas Shortage

Storms in the Southeast have crippled supply lines, raising costs for gas station owners.
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A growing fuel shortage in the Southeast has independent gas station owners and small retailers grappling with dwindling supplies and rising costs.

The shortage, caused by hurricane damage to oil facilities along the Gulf Coast, could last for several more weeks before steady fuel supplies return to the region, experts say.

Making matters worse, major oil companies appear to be supplying their branded stations as a priority, while cutting off small, independent retailers, market watchers say. Less than five percent of the nation's gas stations are owned by large oil companies.

At independent stations, it's often the convenience store that makes the money. Even as motorists flock to pumps, owners who rely on sales of higher-profit-margin items, like soda and snacks, are reporting huge losses.

Gas drives your customer count, but in-store sales drives your business, said Jeff Lenard, a spokesman for the National Association of Convenience Stores. "The added challenge in the Southeast right now is that if everybody's just driving around and standing in line to buy fuel, they're probably not going to go inside and buy anything," he said.

Often, smaller retailers must also fend off accusations of price gouging whenever there's a sharp rise in energy costs. "There is no attempt to understand what wholesale price is," Lenard said, "and if somebody doesn't like what the retail price is, you'd better be prepared for legal action."

This week, the average price for regular gas across Georgia was $3.93 per gallon, 30 cents higher than the national average, according to the AAA.

Trade associations that represent gas retailers in the region said the situation had improved slightly last week, but supplies were still below normal as frantic drivers stocked up on gas.

Last updated: Oct 1, 2008




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