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Milwaukee gas station owner says most pricing factors are out of their control

Milwaukee gas.png
Posted at 6:58 PM, Mar 09, 2022
and last updated 2022-03-09 20:30:32-05

MILWAUKEE — Wisconsinites are feeling the pain at the pump.

According to AAA, the average gas price in Wisconsin reached $3.99 a gallon on Wednesday, which is about 25 cents less than the national average.

At the corner of 8th and Atkinson on Milwaukee’s north-side, one station is selling gas for $3.95 a gallon, across the street it’s $4.05, and on the other side of the interstate it’s $4.29. So why the difference? One gas station owner says they do have a little wiggle room when setting their prices, but most factors are out of their control.

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“That’s not our goal to have these high prices, because a lot of times the higher the prices, the less people are driving,” Kai Trimble-Lea said. “We don’t want to gouge anyone, but we want to be able to make enough money to pay the bills.”

Trimble-Lea says her gas prices increased from $3.95 on Tuesday to $4.05 on Wednesday largely due to the cost of crude oil that’s built into the gas she buys wholesale.

“We want to be here, we’re a lone gas station, so we don’t own multiple gas stations,” she said. “I think supply and demand with everything, if you’re buying more, you’re probably getting it at a lower price.”

Nick Jarmusz with AAA says the conflict in Ukraine has affected the global oil market which trickles down to American consumers.

“That global market can make prices go higher here, even though we're not talking about a particularly large chunk of our domestic consumption being affected,” he said. “There are some indications that that move may have already been baked into the markets, a little bit.”

Jarmusz says demand for gas in the U.S. has increased to pre-pandemic levels and production hasn’t caught up yet.

Taxes are also factored into gas prices. Here in Wisconsin, the state taxes gas at 32.9 cents a gallon to pay for road improvements. That’s on top of a federal gas tax of 18.3 cents per gallon.

Additionally, state law requires gas station owners to set their prices at least 9.18 percent higher than what they pay for it wholesale.

“That’s actually a longstanding law that dates back to the Great Depression when there was concerns that larger oil companies or larger companies would sell gas at a loss in order to undercut smaller mom and pop gas stations and then once they put them out of business, they would jack up their own prices so it was seen at the time as a consumer protection measure to protect against that sort of scenario,” Jarmusz said.

That built in profit margin means gas stations like Trimble-Lea’s are currently making about 37 cents off each gallon they sell. Like most gas stations, Trimble-Lea says her convenience store is what brings in the most revenue.

“We want to be a one-stop shop where when you come here, you’re gonna get gas but you’re going to come in and you’re going to get some snacks, some soda, our take out restaurant so that’s just how it goes,” she said.

The record for a gallon of gas in the Milwaukee area was set in 2012 at $4.20 a gallon. AAA predicts local prices will exceed that amount in the coming days or weeks.

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