The Post has provided excellent coverage of the gas price crunch, but a chart accompanying the Sept. 4 news story "Supply Uncertainty Propels Gas Prices" contained a significant error. The chart shows that the "distribution and marketing costs and profits" component of a gallon of gas is 17.9 percent as of July 5, but the chart transposed the refining component and the marketing component.
Refining costs, in fact, contributed 17.9 percent while marketing and distribution costs should have been listed as 8 percent. Moreover, these were the total monthly costs, according to the Energy Department, not those for just July 5.
Convenience stores sell an estimated three-quarters of all the motor fuels in the United States. Our 2004 survey found that the average retail gross margin on a gallon of gasoline was 12.7 cents per gallon; this is not profit, but includes all costs and whatever is left for profit. As Michelle Singletary noted on the same day, purchases by credit card have constituted the majority of gasoline sales in 2005. Factoring in the approximately 3 percent for credit card fees assessed to retailers, credit card fees for a $3 gallon of gasoline cost retailers approximately 9 cents, leaving the average retailer less than 4 cents to pay all the other bills, including utility costs, depreciation and taxes on any profits.
The reality is that most retailers are lucky to clear a penny or two in profit per gallon in normal times. They seek to make money by selling gasoline in high volumes or gaining sales inside the store on items that have healthier margins. This week, as wholesale prices escalated beyond the retail price increases, many retailers sought to minimize their losses or perhaps break even in selling gasoline.
Energy Department statistics back this up. In looking at numbers comparing 2004 with the first seven months of 2005 (the latest information available, according to the department), the distribution and marketing component -- which includes several costs before the retailer even receives the fuel, such as pipeline and terminal costs -- has shrunk more than 25 percent while prices -- and retailers' costs -- have risen dramatically over the same time frame.
Gasoline retailers have perhaps the slimmest margins in retailing. If they were to offer two-for-one deals or other sale offers common in retailing, they would be out of business in a few days.
We share consumers' frustration over higher prices; we are frustrated as well.
-- Hank Armour
The writer is president and chief executive of the National Association of Convenience Stores.
An Aug. 31 Associated Press article on the Federal Page was a cheap shot. We are all feeling the pinch from higher gasoline prices, but does that mean that the president of the United States should just stay home? If that was the case, your paper would surely accuse him of being out of touch with Americans and important domestic and foreign issues. President Bush is certainly not the first president to travel in an armored vehicle, on Air Force One or aboard Marine One.
Those changes go back many presidents, both Republican and Democratic. This stepped-up security has been around for years and is an unfortunate byproduct of foreign and domestic threats.
Is the president supposed to stay away from the states devastated by Hurricane Katrina because it will cost too much in fuel to get there? Of course not. Traveling throughout America, and sometimes the world, is an important part of any president's job. Unfortunately, it costs more right now, but as a taxpayer, I am certainly willing to pay that price.
-- Lisa J. Roth