With gas prices averaging $3.72 per gallon according to AAA, Minnesota gas stations say they're feeling the pinch due to rising business costs and the fees associated with credit card companies.
On Thursday, AAA reported the average gallon of gas in Minnesota cost $3.53. Minnesota Service Station & Convenience Store Association Executive Director Lance Klatt says many businesses are just trying to keep their head above water.
"It could price retailers out of business," Klatt told WCCO Radio's Vineeta Sawkar during the Morning News on Thursday. "It's a combination of everything just like any industry right now coming out of the pandemic. The high cost of gas, doing business, and the lack of labor due to the high cost of labor. A lot of my retailers are paying $20 per hour."
Klatt says that although gas prices are soaring, it doesn't necessarily mean gas stations are reaping the rewards.
"When gas prices go higher so does the cost of doing business, like in any industry," he said. "Credit card fees, we pay an average of 2 to 3 percent, which translates to about 3-cents on the dollar. If gas is $4 per gallon, every gallon of gas that is sold, 12-cents goes to the credit card companies."
The razer-thin margins means gas stations have to be extra cautious about drive-offs.
"You may see large retailers going to pre-pay as of later. For the Minnesota consumer, be on the lookout because in the future you may see more retailers going to prepay to reduce our liability when it comes to drive-offs."
Klatt added that he's hopeful lawmakers will approve a waiver allowing Minnesota to sell E15 fuel year-round. A federal court ruling in 2021 ended a Trump-administration rule permitting year-round E15 sales.
"With the environment in Ukraine and the price of gas, it just makes sense to allow us retailers in this great state of Minnesota to be able to sell additional Ethanol products year-round," added Klatt.
