In Tennessee a Gas Station Sold Gas for 41 Cents a Gallon Last Month

There have been plenty of gasoline promotions over the years, especially now with gas prices so high, and rising by the day. They bring instant attention, and also participation. But this story isn’t about a promotion, it’s about a mistake. A big mistake.

How much a gallon was gas selling for?

pumping gas
A customer pumps gasoline into his car at an Arco gas station | Getty

According to the AAA’s gas price checker, nationally gas is selling for $4.18 a gallon. If you’re lucky. In Cali where many of us live, you’d be lucky to find prices at $5.50 a gallon. But how crazy would it be to find gas at $0.41 a gallon? 

It happened in Chattanooga, Tennessee last week. There, a Shell gas station missed where the decimal point should have been. Obviously, that little dot should have been one position to the left, to become $4.10 a gallon. 

So for hours, it was pumped at 41 cents a gallon. None of the customers who pumped gas mentioned anything for over five hours. Finally, one customer did notice. But when he was finished, he saw the final tally was only five dollars.

How did the station find the mistake?

24 hour gas station
Drivers fill up at a typical gas station | Getty

Hank DeHart told WRCB, “One of the pumps I stopped and got premium for my wife’s car. I wasn’t even really looking at the price because I didn’t want to. And I went to hang it back up and I realized I had pumped 12 gallons and it only charged me $5.00.” That amounted to $0.45 a gallon.

He immediately told the station owner. You may wonder why, but he has a valid argument besides the obvious, which is that it is wrong. “Yeah, the big oil they are fine,” he said. “But, you know, this guy lives in this neighborhood, owns a business here in Chattanooga or East Ridge. So he’s a local person. He’s not a big corporation, you know?”

Do gas stations rip customers off?

Gas prices
Gas prices going up | Getty

And if you were figuring that owning a gas station is like printing money, think again. According to the Oil Marketers and Grocers Association, they make very little. Factoring in expenses like rent, utilities, freight, labor, and credit card fees, the station owner sees about two cents profit per gallon. That margin is based on the gross amount of profit, which is about 15 cents a gallon.

If an average station sells roughly 4,000 gallons of gas a day, that comes out to $100 per day, once all of the costs above are factored plus other expenses like insurance and maintenance. And while you would expect bigger profits when prices rise, again, you would be wrong.

When wholesale prices rise, station owners try to hold back on raising their prices. They know that the news of rising prices means buyers’ antennas are up for potentially being gouged. So if they see prices raised sharply, they look elsewhere. 

Some station owners lose money on every gallon sold

Filling up a gas tank. Are you driving in a way that increases your fuel economy?
Filling up a gas tank | Getty Images

In situations like that, station owners often lose money on gasoline. When prices go down, retail prices stay at a higher rate to make up for losses. It can take several days from the time wholesale gas prices drop until the price at the pump does likewise. 

But keeping gas prices as low as possible helps to maintain the courtesy stores which is where most of their profit comes from. So the give and take dance should work for everyone.