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Thursday, April 17, 2008
Small stations feel gas pinch
The Atlanta Journal-Constitution
Ray Cole has business records that date back to the 1970s.
Just for the heck of it, he pulled out a few Wednesday to show me how times have changed. One from 1970 showed that a customer paid $2.68 for four quarts of oil and $50.50 for four recapped tires. And get this: someone bought 10.7 gallons of gas for a whopping $3.85.
Times definitely have changed. Especially at the pump, and that’s what brought the Badie Tour to Cole’s Service Station, a fixture in Lilburn for decades. There, coffee and conversation are free. If you’re a senior slowed by age, and the folks at Cole’s know it, an attendant will pump your gas for you, even if you pull into the self-service lane.
Cole had warned me that it might be slow Wednesday morning. He was right. About five customers rolled through, all regulars who’ve traded there for years.
“I’ve never seen it this slow, and I’ve been in the business 33 years,” he told me. “There’s no work, no construction, and that affects all the businesses.”
Last week, a PBS news segment on gas prices featured Lisa Margonelli, an energy expert and fellow at the New America Foundation, a nonprofit public policy institute. She lives in the San Francisco Bay area where, she told me Tuesday, gas has already hit the $4 mark.
Over the phone, she gave me a truncated history of gas stations and the economics of the business. Retail profit margins selling gas are generally thin, she told me. In today’s market, it averages 3 to 4 cents a gallon. And when gas prices are high like they are now, independents and small operators get squeezed the most.
“They can’t let the pump run dry, and they can’t put themselves in a position where they keep the tanks full,” Margonelli said. “The guessing game is intense.”
Cole knows this.
Nightly, he’s faxed a sheet that lists the wholesale price for gasoline. It could be up 4 cents a gallon one day, then 2 cents lower the next. The trick for him is to place an order at the right time. On Wednesday, he placed an order for about 8,500 gallons that cost more than $30,000.
“It’s like the stock market,” said Cole, whose profits run about 2 to 3 cents a gallon. “You try to predict the time to buy it the cheapest. Most times, you don’t.”
Be it high gas prices or tolerable ones, Cole always seems to weather the storm. Long-standing relationships with individual customers and businesses, coupled with on-site auto repairs, help keep the station afloat. In-store stock helps, too - soft drinks, honey buns, headache powders and such. Then there’s the free coffee.
“My customers are everyday people,” he told me. “They like certain things and I try to keep it handy for them.”
Some of the everyday people gathered around the coffee pot Wednesday. I met Charles Allen and L.J. Hoopaugh. We talked about Allen’s love for deer hunting, Hoopaugh’s 50-year career in distribution with Sears and gas prices that are likely here to stay.
“The cost of everything is up, but the people’s income isn’t,” mused Allen, a retired electrician. “All of this is probably a good wake-up call for a lot of people.”
Rick Badie’s column appears on Sundays, Tuesdays and Thursdays. Contact him at 770-263-3875 or e-mail: rbadie@ajc.com.
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