How to price gas at your station: a simple guide.

The pricing math is simple

At the most basic level, your gas price is wholesale cost plus a target margin:

retail price = wholesale cost + target margin

Example:
  Wholesale (rack + freight): $3.10/gal
  Target margin:                $0.20/gal
  Retail price posted:          $3.30/gal

That's the math. The work is figuring out the wholesale cost correctly, choosing the right target margin, and adjusting when something changes.

Knowing your wholesale cost

Your jobber sends you a wholesale price every morning, or you look it up in an industry feed like OPIS or DTN. The number is usually the rack price (terminal wholesale) plus the freight your jobber charges to truck it to you.

Important: the wholesale price you pay today is for fuel that's in the truck right now. The fuel in your tanks was bought 1–14 days ago at a different price. For pricing decisions, use today's wholesale cost, not your tank's blended cost. You're pricing for the next gallon you'll sell, which gets replaced by the next delivery.

Choosing your target margin

Three factors that should drive your target margin:

Your volume. High-volume stations can accept thinner margins because they make it up on gallons. A station selling 100,000 gal/month at 15¢ makes more than a station selling 30,000 gal/month at 25¢. Most high-volume highway sites target 12–18¢; most rural single-store sites target 20–28¢.

Your costs. A station with $7,500/ month in rent needs more margin per gallon than one with paid-off real estate. Calculate your monthly operating cost, divide by expected monthly gallons, and you have a floor on the margin you need just to break even on the fuel side.

Your competitive position. Are you the cheap option, the premium option, or in the middle? Cheap-option stations target lower margins and higher volume; premium-option stations target higher margins and accept lower volume.

The competitor check

Check your nearest competitors' prices daily. Most owners drive past one or two competitors on their way to the station; that's usually enough. Higher-volume operators use a pricing service like GasBuddy Business or check the state's weights-and-measures price-posting requirement compliance database.

Three competitors are usually enough to know your market position:

• The cheapest station within 1 mile (usually a high-volume independent or a big-brand corporate).
• The closest station of your same brand (or unbranded if you're unbranded).
• The most-traveled-past station from your direction (the one customers see before yours).

How often to reprice

Different grades reprice at different cadences:

When wholesale moves sharply

Wholesale prices move every day, but sometimes they move 10–30 cents in a single day (refinery outage, hurricane, geopolitical event). When that happens, don't chase the market day-to-day.

Two reasons to hold price for 24–48 hours:

1. The fuel in your tanks was bought at the old price. You can sell it at the old margin for a day or two and bank extra margin while competitors are panic-pricing.
2. The market often overcorrects.A 20¢ wholesale jump on Monday is often followed by a partial reversal Tuesday. Stations that chased the Monday number reprice down on Tuesday and confuse customers.

On sustained moves (3+ days in the same direction), adjust. On single-day spikes, hold.

Worked example: a typical pricing day

Tuesday morning, 6 AM. Owner checks pricing:

Today's wholesale cost (jobber email):
  Regular:  $3.08
  Mid:      $3.18
  Premium:  $3.28
  Diesel:   $3.45

Competitor check (drove past 3 stations):
  Closest cheap option: regular $3.29
  Same-brand neighbor:  regular $3.35
  Highway driveby:      regular $3.32

Owner's reasoning:
  - Target margin on regular: 22¢
  - At $3.08 wholesale, that's $3.30 retail
  - Cheap competitor at $3.29; same-brand at $3.35
  - $3.30 is within 1¢ of cheap competitor → competitive
  - $3.30 is 5¢ below same-brand → no risk losing volume

Decision: Reprice regular to $3.299 (matches cheap competitor)
Mid: $3.299 + $0.20 = $3.499
Premium: hold last week's $3.749 (1¢ below 22¢ target on
  $3.28 wholesale; acceptable for weekly reprice cadence)
Diesel: hold last week's $3.799 (above target on today's $3.45
  wholesale; reprice next Monday)

Result tomorrow morning:
  Realized margin regular: 21.0¢ (close to 22¢ target after fees)
  Volume: tracked similar to last Tuesday
  Cheap competitor moved to $3.31 by noon → still within range

Common gas-pricing mistakes

• Chasing every wholesale move.A 10¢ wholesale spike doesn't require an immediate 10¢ retail move. Hold for 24–48 hours and let the market settle.
• Matching the cheapest station regardless of math.If matching the cheapest puts you below your margin target by 8¢, you're paying customers to buy from you. Sometimes worth it for traffic; usually not.
• Repricing premium daily.Premium customers don't shop the same way regular customers do. Daily premium repricing costs you margin without gaining volume.
• Not accounting for credit-card fees.Your 20¢ target margin becomes 12–14¢ realized after card fees. Build the card fee into the target so the realized number matches what you intended.
• Pricing off a single competitor.The cheapest station in your area can be a competitor running a loss-leader for a month. Check three stations, not one.
• Ignoring tank cost when wholesale crashes.If wholesale drops 15¢ overnight, your tanks still have fuel bought at the higher price. You can't fully reprice down to today's wholesale without losing money on the existing inventory. Reprice down gradually as wholesale stays low.