Ohio Gas Stations Running On Empty

Higher costs, taxes, regulations forcing owners to close or stop selling fuel

COLUMBUS, Ohio, July 2 /PRNewswire/ -- As Ohioans are fueling up for the July 4th weekend and summer vacations, they may pull into their local gas stations to find the doors closed and the pumps dry.

More than 300 gas stations have shut down in Ohio just since 2006 (Source: Bureau of Underground Storage Tank Regulations). Ohio follows the national closing trend, which has no signs of it stopping anytime soon. The Wall Street Journal reported last year that more than 3,000 stations had closed nationwide.

Fuel dealers and station operators in Ohio have been burdened with an increasingly difficult regulatory environment, astronomical credit card fees, and higher taxes as a result of Ohio Tax Reform and the Commercial Activity Tax (CAT). They have also been hurt by cuts to the motor fuel collection allowance which compensates licensed fuel deals for collecting tax on behalf of the State of Ohio. The allowance is slated to be reduced again in the pending State budget.

Compounding the problem is that selling fuel requires established, strong credit lines. The current economic situation and industry challenges have left many dealers without the necessary cash flow and credit to pay for fuel loads when they need them. So they have to temporarily stop selling fuel until they can get the funds to pay for fuel supply.

These issues highlight the common misperception that gas stations are run by major oil refiners. Adding to the confusion is the fact that the majority of fuel dealers are required to display the refiner's logo and marketing materials at their locations as part of industry standard co-branding agreements.

"Everyone, including government officials, thinks we are big oil and can absorb all of these taxes and fees," said James Patneau, Jr., a fuel dealer and station owner from Medina, and Chairman of the Ohio Petroleum Marketers & Convenience Store Association ("OPMCA").

"The truth is that more than 80 percent of OPMCA members are independent, family-operated small businesses who are struggling to keep the doors open with razor-thin margins on gas pump sales," said Patneau.

It is because of those thin margins that most major refiners like Shell, Exxon Mobil and Valero do not own any stations in Ohio; and BP and Sunoco are selling their few remaining stations in the state.

The dwindling number of gas stations is bad for Ohio motorists because it can lead to reduced competition and higher prices. It can also reduce convenience and pose safety issues as motorist are forced to drive miles out of their way to get gas, especially in rural areas.

Janel Kruse, General Manager and an owner in Ottawa Oil Co, Inc. employs 268 Ohioans and operates twenty stations in northwest Ohio. She calculated that business fees and taxes increased more than 242 percent over the last 3 years. Kruse said the company was forced to sell off one if its stations and will sell others if necessary.

"I don't know how much leaner and meaner we can get," said Kruse.

One business owner who operates two retail stations near Canton, said he is keeping their locations afloat by offering specialty food items and personally covering shifts to keep labor costs down.

"We are a dying breed and we need help," he said.

"We are not looking for handouts or bailouts, but we need the government to give us a fair deal," he said.

About OPMCA

The Ohio Petroleum Marketers and Convenience Stores Association is a statewide advocacy group of 500 independent businesses which own and operate more than 4,000 gas stations and convenience stores in the state. Its members provide more than 50,000 jobs to people working in retail service stations, convenience stores, truck stops and commercial fueling facilities in Ohio.

SOURCE Ohio Petroleum Marketers and Convenience Stores Association