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Retailers’ income comprises only about 1% of the final price of a gallon of gas, yet they often feel as if they receive 100% of the blame.

We are the only industry that has a price sign that is big and bold for everyone to see. Not only do our customers, the consumers, see this sign, but our competitors do as well.

More than 97 percent of the nation’s convenience stores selling gasoline are owned or operated by independent companies that rely on sales in their store to run their business. Convenience store retailers dislike high gas prices as much as their customers do. When wholesale gas prices increase, they must fight to attract price-sensitive customers, often at the expense of profits, and watch their already slim gas margins decline while their credit card costs go up.

Retailers are Not “Big Oil”

Most stations sell branded gas, but they are not owned and operated by major oil companies. In fact, 56 percent of convenience stores selling gas are one-store operators, true Mom & Pop operations. It is estimated that only 2 percent of the convenience stores selling gas are owned and operated by a major oil company.

wheredoesyourfillupgoWhile there are multiple factors that influence the price of gasoline, the major components making up what you pay at the pump are crude oil prices along with federal and state taxes. With the WV tax higher than the average, WV retailers have only 9% post-refinery margin to cover the cost of transportation, credit and debit card transaction costs, and any remaining retailer margin.

Crude Oil Price

Crude oil is the largest factor in the price of gasoline. Over the past several years, crude oil prices have fluctuated between a low of $18.38 in November 2001 to a high of $145.31 per barrel in July 2008.

Low Gasoline Inventories

As crude oil prices rise, refiners cut back on their crude oil purchases and reduce their gasoline production, thus maintaining less inventory. When inventories are low often times the demand is greater than the supply so the cost of transportation is increased because we go further distances to obtain the product.

Refinery and Distribution Problems

As witnessed in the aftermath of Hurricane Katrina in 2005, pipeline and refinery problems create tight supplies and spot shortages, which can cause a ripple effect throughout the entire U. S. gasoline market. West Virginia does not have a primary pipeline to bring product into the state. All product delivered to the state has to come by barge and truck, which is a more expensive mode of transportation. In addition, WV only has four product terminals while our surrounding states have as many as 69 (PA). These factors all raise the product cost in West Virginia.

credit card terminalCredit card fees are the convenience and petroleum retailing industry's top pain point. 

In 2008, credit card fees surged another 10.5 percent to reach a record $8.4 billion - nearly three times the level just five years ago and an amount more than $3 billion greater than convenience store industry pretax profits. 

We are urging Congress to persuade the credit card companies to explain their fees, practices and policies to retailers and the public. 

 The National Association of Convenience Stores (NACS), of which OMEGA is a member, is the named plaintiff in a class action suing not only Visa and Mastercard, but also their issuing banks.

 

Day-to-day operations of OMEGA are conducted by the organization's president. The role of the president is to assist members in increasing their business effectiveness and profitability by providing resources for education, training and ideas exchanged; encouraging a high level of business ethics and a positive image for the industry; encouraging governmental action beneficial to the industries through active participation of its membership; and, providing cost effective services for the membership.

Jan Vineyard serves as the president of OMEGA and has 25 years experience in the oil industry.

Jan was named executive director of the West Virginia Petroleum Marketers (WVPMA) and West Virginia Association of Convenience Stores in July 1993. On January 1, 1996 the two organizations merged with the WV Retail Grocers Association to create the West Virginia Oil Marketers and Grocers Association, Inc. Jan retained the position of executive director for this expanded group of nearly 250 members.

Effective October 1, 2006, OMEGA took over management of the West Virginia Motor Truck Association. At that time, Jan became president of both associations. Jan also is Chairwoman of the WV Business Industry Council.

OMEGA members do a great job managing their businesses. However, as with all major industries, OMEGA members receive oversight by many city, county, state and federal regulatory agencies.  In addition to policing ourselves, listed below are just some of the state agencies which oversee and regulate member operations:

Federal and state taxes account for one-fifth, or approximately 15 percent, of the cost of a gallon of gasoline in West Virginia. We pay 50.2 cents in state and federal taxes on every gallon of gasoline we purchase. 

In those border states where the gas tax is lower, West Virginia retailers are negatively impacted.  Customers will drive across the state line to purchase lower cost fuel. In West Virginia, all fuel taxes go to the Department of Highways to fund state road projects.  Through the fuel tax, West Virginia consumers provided nearly $434.9 million in 2015.

OMEGA members are local entrepreneurs employing thousands of West Virginians.  Profits from OMEGA businesses stay in the community and strengthen the state economy. 

While large national department stores and national chain grocery stores - like Wal-Mart and Kroger - are critical to West Virginia, they can, and do, siphon customers from our state's independent local businesses.  In many cases, as you've probably witnessed, even causing community groceries and other retailers to close. In contrast, less than 3 percent of all convenience stores are owned and operated by one of the major oil companies.

Selling restricted products - tobacco, alcohol and lottery - to individuals under age is illegal in West Virginia. State and federal law prohibits selling tobacco and lottery products to anyone under age 18.  An individual must be 21 to purchase alcohol.

Selling restricted products - tobacco, alcohol and lottery - to individuals under age is illegal in West Virginia. State and federal law prohibits selling tobacco and lottery products to anyone under age 18.  An individual must be 21 to purchase alcohol.

In an effort to meet customer demand and increase product offerings, more and more OMEGA member grocers and convenience stores are providing in-store food service.  Items offered range from prepared deli sandwiches and ice cream to in-store food service.

Items offered range from prepared deli sandwiches and ice cream to in-store restaurants. While customers enjoy the convenience and enhanced products, providing food service for the public comes with  major responsibilities. First and foremost, is the issue of food safety.

Most people are aware that there are three choices for gasoline at the pumps: regular, mid-grade and premium.  But what does it all mean, and is there a difference?

Regular grade gasoline is perfectly fine for most drivers and is now the dominant fuel of choice.  However, the more powerful the car engine the more sensitive a driver should be to the type and grade of gasoline they put in their car.


OMEGA Members Receive a 3.4% discount


West Virginia Oil Marketers and Grocers Association - 2006 Kanawha Blvd. East - Charleston, West Virginia 25311 - 304-343-5500 | Website Design by Bricks Without Straw