Stephen Ballard on Friday raised the price at his two Purcell gas stations to $3.99 a gallon, a level he's reached three times before, but never crossed.
“That's a psychological barrier,” he said. “Our customers hate it. We hate it. Gasoline is the most highly watched retail price in the world. There's hardly anybody who doesn't know what local prices are every day.”
Ballard owns the Varsity Valero and Guzzlers convenience stores in Purcell.
Two years ago, he spent $500 to upgrade his signs so they can display prices above $4. He said he hopes he doesn't have to use them. But with wholesale prices soaring as much as 70 cents a gallon in the past five weeks, there seems to be no end in sight.
Convenience store owners throughout the state are facing the same challenge.
“I would much rather sell gasoline at $1 than at $4,” said Jim Griffith, CEO of Stillwater-based OnCue Express. “At higher prices, my credit card costs are a lot higher, the customers are not happy, and we're not happy. People blame us, and my poor clerks catch a hard time about it.”
Retailers typically operate on small margins for gasoline, making most of their profits inside the store by selling drinks, snacks and other items.
“There are no margins when prices climb,” said Mike Thornbrugh, spokesman for Tulsa-based Quick Trip. “Your job is just to keep as close to even as you possibly can.”
Quick Trip stations typically sell a full load of fuel one or two times a day, Thornbrugh said.
“Every time we get a new load of gas, we pay a new price for it,” he said.
Lately, each new tank has cost much more.
The average price for a gallon of gasoline in Oklahoma City on Friday hit $3.96, up 68 cents over the past month and more than 30 cents higher than the national average of $3.66, according to GasBuddy.com.
Griffith and Thornbrugh both said they have been told their prices are rising largely because of refinery problems in the area, which have led to lower-than-normal gasoline supplies.
Regional refiners and gasoline marketers typically have about 20 to 25 days worth of fuel available at all times, Thornbrugh said. Today, that level is down to 11 or 12 days.
Mechanical problems blamed
The inventories are down largely because of mechanical problems at four refineries in the region, Griffith said.
“What are the odds four would have problems at the same time? Somebody needs to take a look at the whole distribution network,” Griffith said. “It's a mess out there.”
Because the refining and distribution issues are temporary, Griffith and Thornbrugh said prices should eventually return to normal.
It's still unclear when that will happen.
“The question is going to be timing,” Thornbrugh said. “Over the next couple of weeks, the inventories are going to increase. We will have more refineries come back online and you will see prices decline.”
But don't look for prices to drop yet.
“We're not out of the woods yet. There could still be more unpleasant bumps before that happens,” Thornbrugh said. “This situation is temporary and abnormal. It will be corrected. But it will not happen overnight.”