Question 1

How do you calculate fuel margin per gallon at a gas station?

Accepted Answer

Start with the pump price, take off the federal and state fuel taxes, take off the delivered cost of the fuel (rack price plus freight), and take off the card processing fee, which is a percentage of the pump price. What is left is the gross margin per gallon before store overhead.

Question 2

What is the diesel street margin?

Accepted Answer

The spread between the average retail diesel price and the wholesale diesel benchmark. Fuel Data Portal publishes it as the FDP Diesel Street Margin: the U.S. retail diesel average from the EIA minus the Gulf Coast ULSD spot price. It still contains fuel taxes and the whole distribution and retail margin, so it is a gauge of the street, not a net dealer margin.

Question 3

Why does my fuel margin fall when wholesale prices rise?

Accepted Answer

Pump prices follow wholesale prices with a lag. When the rack rises quickly, retailers raise the pump price more slowly to hold volume, and the margin narrows. When the rack falls, pump prices fall more slowly and the margin widens. Card fees make it worse on the way up, because the fee is a percentage of a higher pump price.

Pump price
Fuel taxes
Card fee
Rack price
Freight
Gross margin

Fuel Margin Checker