How Californian Gas Station Owners Are Reacting to Record High Prices

As gas prices continue to climb higher in California, lawmakers in the state have been looking at multiple short-term options to relieve Californians. Governor Gavin Newsom and some Democrats favor a gas tax holiday to delay the expected rise in the gas tax due in July, along with tax rebates for Californians to offset high prices. Republicans, along with a handful of Democrats, are more in favor of suspending the gas tax for between six months to a year, with lost tax revenue of $6 billion to be made up by tapping into the state’s surplus that could be as high as $60 billion. Other Democrats are skittish of both plans and simply want to continue with the longer-term solution of electric car proliferation and renewable energy production replacing fossil fuels in the next few decades.

Lawmakers, as well as oil companies, state agencies, federal agencies, and others keep looking for solutions. Some solutions include tapping into the Strategic Petroleum Reserve, or more radical options harken back to the days of the OPEC oil embargo in the 1970’s.

The Globe talked with those on the other end of the situation, gas station owners and managers, about what the situation is there and what they think can be done.

“I would honestly charge less if I could,” said Alan Sutton, a Southern Californian gas station owner, to the Globe on Thursday. “But the price of gas is just so much tied in with crude oil, plus our margins are so thin. We make a penny or two on a gallon of gas after you factor in paying employees, rent, building upkeep, and everything. It’s very low. We take the price down even a penny per gallon and we would find ourselves in a bad financial place.”

Another gas station owner in Los Angeles, Rodrigo Ortiz, agreed. “We don’t get a call from Chevron or 66 or whatever headquarters each day telling us to charge more. The price is the price we buy it for and we add on a bit, but you know, we have to pay the workers here and buy new equipment too.”

“I’m at a relatively busy area, so a lot of money we make is through food sales and sodas and lotto tickets and cigarettes. We actually like it when the jackpot is high because we sell more lotto tickets and make more money. Gas prices are different in different places too I should add. If you’re the only station in a long stretch of highway, yeah, you charge more. I can’t speak to price gouging, but the costs to ship it to more desolate areas, plus how much they are actually selling, factor in to higher prices. Busy areas have it too, but it’s because a lot of people getting gas means costs go up and the volume used goes up. Wealthier areas also have higher prices, but wealthier areas also tend to have fewer gas stations, so it becomes a matter of volume and replacement costs and supply and demand.”

$5.69 a gallon average and climbing

The Globe then asked what they thought should be done.

“Get rid of the gas tax at least for awhile, urge Californians to only drive when needed, and stop filling up more recreational vehicles like RVs, dirt bikes, dune buggies, and things like that.” said Donna Sharpe, a gas station manager in Inglewood. “It’s common sense. California has the money to pay the tax for a year, so do that. Maybe have some people walk or take the Metro or other options instead of drive if they can. And don’t waste gas on larger vehicles or things used for sport  at least for a while while we figure this all out. Maybe ease up on vacations for a bit to help the oil supply. Just common sense stuff really. I know different parts of the state rely more on cars and trucks than other parts, but I’m sure at least some of these apply everywhere.”

Other owners also noted several of the same things.

“Gas tax is the first thing,” said Ortiz. “We have all that money saved up from lowered spending post-COVID; let’s use part of it to help Californians at the pump. The sheer joy in seeing prices drop by half a dollar overnight would mean a lot. After that, maybe some federal relief. Don’t know what, maybe increased oil production or something.”

“I’m not sure about limiting gas to cars, that seems like it can bring in a lot of trouble, but there needs to be more scrutiny for people in that regard. Like skip some trips or something. I don’t know. But that gas tax, that needs to go.”

Sutton added “Reduction of state and federal taxes for a bit would help. You know, don’t do wartime rationing or getting people to but gas with odd and even numbered plates on different days, but maybe get people to use less and drive less, at least for the interim. I don’t know what that would look like, and my station might end losing some money through lost sales, but if you are looking at gas relief, you know, everyone needs to suffer a bit for us to get through this. We’ve made it through similar oil crises’ and stretches of high gas prices before. We can do it again.”

As of Thursday, the average price for gas in California according to AAA is $5.69 a gallon.