Gasoline sales are not the primary source of revenue most gas stations depend on to stay in business. That’s because many only make pennies per gallon.  

Kevin Sharrak, owner of a Marathon gas station in Berkley. Most of his customers are attracted to the store because of its grocery products and wide ranging beverage options. PHOTO: Natasha Dado/TAAN.

Allie Berry of Armada Gas and Oil Company says some station owners in metro Detroit could be making less than 10 cents off a gallon, while in cities such as Chicago, fuel stations are profiting 25 cents a gallon. 

Kevin Sharrak owns a Marathon in Berkley and says one method gas station owners often use to boost sales is lowering gas prices in hopes that it will attract more customers who in return may purchase items inside the store that are more profitable. 

“We would rather sell a bottle of wine and make a reasonable profit than sell gas and make pennies,” said Sharrak. He says the purchase of a cup of coffee or cappuccino can be more financially beneficial than a gas sale.   

Station owners who carry donuts may sell one for a dollar, although they purchase each at 55 cents. The 45 cent profit is more attractive than a gas purchase considering some station owners could only be making less than a dime off a gallon. 

For most in the industry, gas is merely an attraction used to lure in customers who will purchase items that are more profitable such as beverages, lottery tickets, cigarettes, groceries or auto  services.      

Berry is familiar with the tactic of lowering gas prices to sway in customers, but says it may not be too smart in a case where a gas station is on every corner. Heavy traffic might drive people in a hurry to other stations and the business with the lowest price could lose money. 

Berry has been in the gas and oil industry for decades and admits it’s not as financially profitable as it was a decade ago. He says today station owners must offer a range of other products such as beer, wine and liquor, which Sharrak added this year.

“Honestly if they’re struggling to stay open I recommend they just leave and go work for people and they would make more money,” Berry said.  “You can’t be a small gas station. You have to offer more.” 

Sharrak says most of his customers are attracted to the station because of its grocery line.   Sharrak’s customer Justin Beck says 80% of the time he’s at the station it’s not to purchase gas.