The gross margin on gasoline in 2018 was 23.8 cents per gallon, or 8.7% of the average price of $2.72 for the year. Retailer gross margins have averaged 21.6 cents per gallon, or 8.5% of the overall price.
Gasoline Profit and Markup
- The average profit made on a gallon of gas is about $0.17.
- The profit margin on a gallon of gas is about $0.20.
- The markup on a gallon of gas averages 30 cents.
Gasoline Production and Cost
- The cost to refine gasoline varies between 40 cents and 70 cents per gallon.
- About $0.05 per gallon is profit for refineries.
- Retailers averaged about $0.04 per gallon in profit.
- Gas retailers receive a net profit per gallon of around $0.03-$0.07.
- Gas stations have a net profit margin of less than two percent.
Gas Station Operations
- Most gas stations make the majority of their money from convenience store items.
- Top Sellers at Gas Station Stores: Cigarettes (34.4 percent).
Profit Metrics and Financials
- A successful gas station owner can make anywhere from $40,000 to $100,000 annually.
- After expenses, a retailer makes a third of the average markup in profits.
- Stations barely scrape by, or even lose money, especially when gas prices surge.
- The average car consumes more than 500 gallons of gas a year.
Gas stations operate on thin profit margins, with net profits per gallon averaging around 3 cents. Operating costs, market competition, and tax laws significantly impact the profit scenario in the gasoline industry.