Gas station owner jacks up prices to prove a point
Perhaps it's not just gasoline users that oil companies are squeezing -- station owners might be locked in the vice as well. Bob Oyster, a Shell station owner in San Francisco, is making a statement to Shell and to his customers to let them know what he thinks of it.
To hear Bob tell it, Shell has made it impossible to stay in business. After owning his station for 22 years, he's returning it to Shell at the end of the month. Shell charges him more for gas in San Francisco than in other parts of the Bay, where he also owns stations, but won't let him buy gas anywhere else. They have also raised his rent by leaps and bounds. Five years ago he fought to keep his rent at $6,000 per month based on real estate values, when Shell wanted $13,000. This year they again requested $13K. Shell says that's what the market is worth. Oyster says "I got fed up." What did he do? He raised his gas prices to well over $4 a gallon, and ever since, he hardly sees a customer.
"It makes a statement," he said, "and I guess when people see that price they also see the Shell sign right next to it." Like other independent owners, Oyster makes his money off the convenience store extras, but his lot is so small he doesn't have room for much other than candy and cigarettes. He believes oil companies are trying to squeeze out the independents, but Shell says most of its stations are independently-owned and that that number is increasing. "I'm going out with a bang,'' says Oyster. "And I don't care if I don't pump a gallon on the last day.'' And he probably won't: the Chevron across the street sells gas for 70 cents less.
Thanks for the tip, Mike!
[Source: SF Gate]
Reader Comments (Page 1 of 3)
Quattrofan 11:01AM (5/11/2007)
$4 gas is just around the corner. I use premium and live in Cali, paying around $3.60 for a gallon right now. With summer around the corner, yeah I can see it . (BTW, Congrats and Thanks to all of you who voted for Bush).
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Jeff Gilleran 11:04AM (5/11/2007)
Bob Oyster?.. and he's employed by "Shell".
Seriously, is that his real name?
No Joke?
:)
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Big Mike Wood 11:34AM (5/11/2007)
What? Oil companies manipulate gas prices? Whodathunkit. The only REAL question here is why we let them get away with it.
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Steve B. 11:33AM (5/11/2007)
"BTW, Congrats and Thanks to all of you who voted for Bush)"
?????????
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BCM 11:35AM (5/11/2007)
If he's paying Shell rent, then he's a lessee, not an "owner", and his landlord can charge him what the market will bear. As for charging a higher price for gas and not allowing him to buy from different suppliers, he should consult an attorney, because I thought that became illegal sometime back in the 1980s. Then again, the current administration has been a lot more lenient than most about enforcing antitrust laws against megacorporations. Props to him for finding a creative way to fight back, however.
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greg 11:40AM (5/11/2007)
I think it may be true gas companies gouging here may have something to do with demand. Overseas gas consumption is growing faster than ever and I am sure they see that the US may eventually not be their number one consumer of fuel. It may become the east. Anyone an expert at this? I am just speculating.
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Avinash machado 11:46AM (5/11/2007)
#6 You may be right. China and India could eventually overtake the US in oil consumption. They do have a very large population.
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geo.stewart 11:57AM (5/11/2007)
what kind of idiot blames 1 person for the world's energy issues?
China and India are going through the industrialization that the US saw for a 100 yrs. All the calls for moving fuel economy ratings up on cars is are well intended but will likely have little impact. With all of the oil being burnt by emerging countries, our own countries industrialization,... 40% increase in the next 5 yrs will be a small percentage in the overall picture.
and who should tell China and India to conserve?
I'll grant the Shell and BP monoliths are out of control but not sure how you control that. Do you say its only fair to make this much money, or this percent? Put Mr Gates in that line and Mr Buffet...
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Aki 12:28PM (5/11/2007)
I'm scratching my head and wondering why the govt can't intervene on ConnocoPhilippe and Exxonmobil to stop the price gouging. Yes global oil demand is increasing, but oil companies are making A KILLING in profits, not sales. They're posting record profits in the midst of the supposed oil scare.
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Rob Huck 12:29PM (5/11/2007)
#1 - Who vetoed drilling in ANWR? Bill Clinton. Who makes it impossible for oil companies to open or expand refineries? Entrenched EPA bureaucrats who can't be fired, liberal environmentalist nuts, and liberal judges appointed by Carter and Clinton. Same story with offshore drilling in California and the Gulf. If it were up to Bush, we'd have all these things and there would be plenty of gas to go around. You're also forgetting increased demand in Asia is putting a squeeze on the world oil markets. We had cheap gas in the 90s b/c Asia's economy had crashed and no one there was buying oil. Now they've recovered and since the liberals in this country won't let us expand drilling or refinery capacity, we're stuck with buying from the mideast like everyone else. Get the liberals out of our lives and we'll have plenty of gas.
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Sandeep 12:34PM (5/11/2007)
Just want to mention that, at least in India, nearly all their automobiles (which are far fewer in number than motorcycles) are considerably more fuel efficient, with 3-4 cylinder engines the norm on nearly all cars. Of course there are a few exceptions, such as a Benz E-Class, but the vast majority of people there are driving much much smaller and more fuel efficient cars than we are.
I'd blame the fact that oil is just so 'cheap' considering how much energy it can put out for electricity and other purposes (crucial in developing countries).
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Dr. Woo 12:36PM (5/11/2007)
"I refuse to by Shell gas, period."
That's interesting, because I refuse to buy anything BUT Shell gas, period.
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scappy 12:53PM (5/11/2007)
Disclaimer: I am no way in favor of paying $3 a gallon.
If I am not mistaken ExxonMobil's profit margin is around 10%. Which is pretty good, but its not like 1$ of every gallon goes to profits.
Though on the flip side of the coin I don't think the CEO needed a billion dollar severence package either.
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Boggled 12:44PM (5/11/2007)
@8, "I'll grant the Shell and BP monoliths are out of control but not sure how you control that."
Perhaps you mean "goliath" or something similar rather than "monolith". Regardless, a lot of people believe share the opinion that Exxon and other gas/oil companies having record-busting profits at the same time that prices increase in somewhat dramatic fashion implies that there is a huge conspiracy to artificially inflate prices above a fair market value by these companies. Though recent price increases at the consumer level DO adversely affect quality of life for a large population of Americans and are detrimental in the short term to the economy as a whole, I don't believe such a conspiracy exists. In previous decades, when these companies were not the profit-raking powerhouses they are today (relatively), corporate level decisions were made to increase efficiency, ramp up supply, and diversify risk from oil supply threats such as OPEC in the late 70s. To such means, we now have much more offshore oil rigs, increased drilling in multiple areas of the world, and GREATLY improved methods of harvesting raw supply. These changes took a LOT of money and time to put in place, and these companies are now reaping the benefits of this investment. Because oil and gasoline are products that are present in everyday life of most Americans, and due to the fact that it is now seen as a harmful but necessary product, it is easy to see how these companies can draw so much negative attention from the press. If these companies instead sold microchips, would we vilify them in the same manner?
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JC3 12:46PM (5/11/2007)
11.You might add the fact that the C.A.F.E. standards imposed by the dems.to penalize car co.s(which generated money for more bloated gov't) helped propel SUV sales which are exempt from these standards.By the way,when the dems. take over and surrender to the taliban and other Islamic terrorists who want to take Iraq we'll see the price of gas go way up.
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Aki 1:01PM (5/11/2007)
"If I am not mistaken ExxonMobil's profit margin is around 10%. Which is pretty good, but its not like 1$ of every gallon goes to profits."
$10 bil profit on $100 billion revenue is pretty amazing.
Nor is it just infrastructural efficiency. Pretty much every single gas company made away with fat profits from raising prices, including BP, Royal Dutch Shell, ChevronTexaco, ConocoPhilips.
Oil companies talk about the industry being cyclical, but even at the "low" point in 2001, they still made a profit overall (2 billion profit totaling all oil companies). So even talking about cycles is ridiculous, because it never hits a low. It breaks even at worse.
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$0.02 1:06PM (5/11/2007)
Mergers during the Clinton Administration have more to do with gas prices than the Bush Administration. Educated people know that there is a lot more to gas prices than an administration
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Richard Warren 1:04PM (5/11/2007)
Back in the 70's when I owned an ARCO station in California, "Rent" was figured at a per gallon price and included in your tanker price and payment.
Someone mentioned not buying from other suppliers and to contact an attorney. Hello!! You are a (insert brand of choice here) dealer selling that brand under the banner and trademark of that company. Of course you can't buy from someone else and sell it as the branded fuel and the oil company is not going to let you put a sign out saying "Today we sell Chevron fuel" when you are a Shell dealer. My old lease from back then stated I had to buy 98% of my product from Arco.
In 1970 when I started my Arco station fuel was 42.9 cents. Take what it would sell for today with inflation 2.22 per gallon. That's base, before anything else that might affect the price such as more difficult to find, more expensive to drill deeper,transportation, world events, and the old supply and demand. 3.00 a gallon today with everything that's going on? A bargin. It cost me 10.00 more this week to fill up, that's 40.00 a month. If you're that close in your budget, something is wrong with your budget.
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epp_b 1:39PM (5/11/2007)
For Poster #3
http://www.google.com/search?q=define:sarcasm
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Aki 1:07PM (5/11/2007)
"It cost me 10.00 more this week to fill up, that's 40.00 a month. If you're that close in your budget, something is wrong with your budget."
Uh, do you think most people spend $40 a month on gas? Commuters spend more than that in one week.
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