Why is Exxon selling all of its gas stations?
Answers
127 points
Wantitbad answered one year ago …
It may seem strange but Exxon is not making enough profit margin on there gas stations to make operating them a viable enterprise anymore. Maybe they should lower crude and then they could make more money on there stations :)
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2082 points
alanj answered one year ago …
I read a news item the other day on this subject. It could have been on CNNMONEY.COM. The profit margin on gas stations is less than their other operations. So they're selling them. In fact the profit margin for US oil companies is below the S&P 500 profit margin average for 2007. The oil companies profit margin was something like 11.2% for 2007 and is expected to be less for 2008. (There are other corporations that are making as much as a 30% profit margin.) I heard from another source that once a barrel of oil gets above $70 they can't pass on all of the increase to the consumer. In other words their profits start going down. Our US oil companies have no control over the price per barrel. They buy on the open (foreign) market because congress will not allow any more new oil fields to be opened here in the US. We simple don't have enough supply here in the US to keep up with the demand.
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waltone answered one year ago …
To escape the ongoing litigation from leaky storage tanks. (Also, in New Jersey for instance, immigrant India families are ready with top money to buy gas stations.)
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waltone answered one year ago …
When FORD's recent price was around $7, Kavorkian began paying $8.50 for millions of shares---and the price dropped dorwn to $6. Why???
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chronamyd answered one year ago …
price of fuel is going too high and for polution problems because the world won' put up with it forever.
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142 points
zachmckinney answered one year ago …
It looks like when gas prices reach a certain threshold, consumers change the way they use gasoline and find alternative ways of transportation, forcing profit margins down for companies like Exxon, resulting in them selling off these businesses.
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mvliggett answered one year ago …
It seems to me clear that as the price to fill up rises, the customer has less available money for the impulse buys inside the store (eg. bottled water, Red Bull, et.c), which have the profit margin needed to sustain the profit motive of the business. Simple economics my friends.
Read more from mvliggett103 points
rkarban answered one year ago …
I like mvliggett's answer. Most of the profit margin in a gas station is in the store. If you don't have extra money, you don't act on an impulse to buy something that you didn't need in the first place (in the store!!)
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