How to track fuel margin at a gas station.

What is fuel margin?

Fuel margin is the per-gallon profit on a gas sale. At the simplest level it's the retail price the customer paid minus the wholesale cost you paid your jobber. The headline number (18¢/gal on regular gasoline, say) is what operators set when repricing.

Realized margin is the headline number minus the real-world costs that don't show up at repricing: card-processing fees (0.5–1.0¢/gal typical) and wet-stock loss (pump miscalibration, evaporation, theft). Realized margin is what actually hits the bank.

The fuel margin formula

gross margin per gallon = retail price − wholesale cost

realized margin per gallon =
    retail price
  − wholesale cost
  − card fee (per gallon)
  − (wet-stock loss in gallons × wholesale cost ÷ gallons sold)

total realized margin = realized per gallon × gallons sold

gap = target margin − realized margin

Three numbers people frequently miscount.

Card-processing fees.Typical fuel-at-pump interchange + processor fees run 0.5–1.0¢/gal. On 30,000 gallons that's $150–$300/month. Some operators have negotiated flat fuel-fee structures; check your merchant statement for the actual rate.

Wet-stock loss allocation.If your tank dropped 15 more gallons than the POS dispensed during the period (after deliveries), that's 15 gallons of cost without revenue. At a $4.11 wholesale cost, $61.65 of real loss to allocate against the period's gallons.

Per-grade, not per-station. Regular runs different margin than premium. Aggregating obscures grade-level patterns (premium pump miscalibrated, mid-grade supplier cost mistracked). Always track per grade.

What data you need

Step-by-step: track fuel margin for one period

1. Set target margin per grade at repricing

When you reprice (typically daily on regular, less often on premium and diesel), record the target. Example: regular at retail $4.29, cost $4.11, target = 18¢/gal. Save the target with the repricing timestamp.

2. Record wholesale cost per delivery

Pull cost from the jobber's daily email, the OPIS or DTN feed if you subscribe, or the printed cost sheet. Tag each cost with the delivery date and grade. Cost moves daily; track the weighted-average cost per period if multiple deliveries happen.

3. Capture POS-side dispensed gallons continuously

Every fuel transaction at the pump records grade, gallons, retail, tender, and timestamp. This is the canonical record of what sold. Where POS integration is wired, it flows automatically; otherwise it's the daily X-report read.

4. Read the dispenser totalizer daily

Every dispenser has a totalizer, a non-resettable counter of gallons dispensed since the pump was installed (or last calibrated). The delta between today's reading and yesterday's should match POS-reported gallons. Variance suggests miscalibration, unrecorded sales, or wet-stock loss.

5. Read ATG inventory (or manual stick)

Tank inventory delta = previous inventory + deliveries received − dispensed gallons. If actual end-of-day inventory is 15 gallons less than that calculation predicts, you have a 15-gallon wet-stock variance.

6. Compute realized margin per gallon

Run the formula:

realized = retail − wholesale − card_fee − (wet_stock_loss × wholesale ÷ gallons)

7. Compare realized vs. target

Gap = target − realized. Tag the period:

• Tight gap (≤ 1¢/gal): within expected noise, no action.
• Normal gap (1–3¢/gal): monitor; no immediate action.
• Wide gap (3–5¢/gal): investigate pump calibration, wholesale tracking, card-fee rate.
• Critical gap (> 5¢/gal): pump-vs-POS check, wholesale audit, processor-rate verification.

Worked example: a 5.9¢/gal gap

Regular gasoline. Period = one day. Target margin set at 18¢/gal.

Inputs:
  Retail price:           $4.29 / gal
  Wholesale cost:         $4.11 / gal
  Card fee:               $0.0075 / gal (0.75¢)
  Gallons sold (POS):     1,200 gal
  Wet-stock variance:     +15 gal over-dispense
  Target margin:          $0.18 / gal

Compute:
  Gross margin:           $4.29 − $4.11 = $0.18 / gal
  Wet-stock loss $:       15 × $4.11 = $61.65
  Wet-stock per gallon:   $61.65 / 1,200 = $0.0514 / gal
  Realized per gallon:    $0.18 − $0.0075 − $0.0514 = $0.1211 / gal
  Gap vs. target:         $0.18 − $0.1211 = $0.0589 / gal (5.9¢)

Verdict: critical gap.
Action: pump-calibration check on regular dispensers.

Gross margin matched target (18¢/gal). The 5.9¢ gap to realized comes from a 0.75¢ card fee + 5.1¢ wet-stock allocation. The wet-stock variance is the dominant cost, a pump-calibration check is the next step.

Why fuel sales rise while profit drops

Three patterns produce more gallons sold but less actual margin. All three are easy to miss because the headline (sales up, gallons up) looks healthy.

Wholesale ran up during the period.You sold at last week's retail price but bought at this week's higher cost. Margin compresses against fixed retail. Visible in target-vs-realized as a widening gap.

Wet-stock loss compounded. A pump miscalibrated by 0.5% over-dispenses 5 gallons per 1,000. At higher volume the compounding loss grows. Realized margin drops while gallons rise.

Card-tender mix shifted. More fuel-card volume means higher processor fees per gallon than cash or regular debit. Card-fee allocation goes up; realized margin goes down.

How to compare margin across stores

Per-gallon margin is the comparison unit, not total margin (which confuses volume with efficiency). At 30,000 gal/month, a 14¢ realized margin is $4,200 monthly. At 50,000 gal/month, a 12¢ realized margin is $6,000, more dollars, lower efficiency. Both numbers matter; conflating them hides the efficiency conversation.

Compare each store to its own historical band, then peer-compare across the portfolio. A store running 15¢ realized when peers run 17¢ might be fine if its historical band is 14–16¢; might be a problem if its historical band is 17–19¢.