Letter: Swallow Oil wasn’t price gouging | PostIndependent.com

Letter: Swallow Oil wasn’t price gouging

The last time I looked the United States was a capitalist society. Even though the current administration has tried to change that, we are still a capitalist society.

Saying this, I have to wonder why all those writing and complaining about the gas prices in Rifle and up and down the valley have not opened up their own gas station or gas wholesale business? From the comments I have read about Swallow Oil, anyone could get rich doing this.

The fact is, anyone can find out the cost of gasoline and diesel sold at the racks in Grand Junction and Denver by accessing the Oil Price Information Service or “OPIS.” This website provides rack prices for branded and unbranded products sold at the racks around the country.

So if a person finds that a gallon of gas is $3.10 at the rack in Denver, you then can ask most independent fuel haulers what they charge and they will tell you it will cost about nine to 10 cents per gallon to be transported to Rifle. Add in the state tax on gas of 22 cents, the federal tax of $0.185 and the cost of the gallon of product is now $3.60 per gallon. So now, what should the “fair” markup be? Should it be like clothing which is more than 100 percent in most cases? Should it be what your local insurance agent makes on an auto policy, which ranges from 15-30 percent? How about grocery stores, the average mark-up is about 13-15 percent? Actually gas station owners make less than the government makes, the mark-up is around 10 percent by most gas stations in the valley. Does any reasonable person think this is gouging? That is 36 cent per gallon gross, take out property insurance, wages and benefits for employees, cost of maintenance … by the way a gas dispenser can cost over $15,000 per unit, electricity, and let’s not forget credit card fees, which for every transaction is at least 3.5 percent. What do we come up with? Less than 5 percent per gallon. Hardly gouging!

Steve Jones


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