The Economics of Everyday Things Gas Stations (UPDATED)
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Oct 24, 2025 J.P. Seti, a seasoned gas station owner, shares his journey from immigrant to entrepreneur in the convenience retail space. He and Garrett Golding from the Federal Reserve dissect the complexities of the gas supply chain and analyze how slim profit margins truly are for station owners. They discuss the competitive landscape at the pumps, the impact of electric vehicles, and how convenience store sales drive more revenue than fuel. Insights about rising gas prices and their effects on consumer behavior make for a compelling conversation.
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Where Gas Money Actually Goes
- Most of the retail price of gasoline reflects upstream costs like crude, refining, and taxes rather than station profits.
- Gas station owners typically keep only a small fraction of the pump price to cover overhead and fuel delivery.
From New Delhi To Station Owner
- J.P. Seti emigrated from New Delhi and bought his first convenience-store gas station in 1980 for $80,000.
- He worked long hours and eventually owned more than 40 gas stations, showing small-start persistence.
Tiny Pump Margins Add Up Slowly
- Typical net profit per gallon for station owners is tiny, around a few cents.
- At average volumes that translates to only a few hundred dollars of daily profit from fuel sales.