ATLANTA — Georgia drivers are expected to see higher gas prices in the coming days now that the state’s gas tax suspension has ended, but industry officials say gas stations may not see larger profits as a result.
The state tax is roughly 33 cents per gallon and is expected to begin appearing at the pump as stations receive new fuel supplies. Gov. Brian Kemp ordered the suspension in March after war began in the Middle East.
Jeff Lenard with the National Association of Convenience Stores says many people assume gas stations make most of their money at the pump, but that is not the case.
“I think what most people assume is that gas stations make their money at the pump but the opposite is true, gas drives traffic to the pump and then inside the store,” Lenard said.
Lenard says the typical gas station makes about 10 cents per gallon in profit, and those margins have tightened as fuel prices have increased.
“And that’s down a few cents because margins have tightened, and at the same time the expenses to deliver the fuel which had increased because the prices of fuel have increased,” Lenard said.
According to Lenard, most station profits come from sales inside convenience stores, including food and drinks.
“Where stores make their money is when you go inside, buy a snack, buy a drink, buy a sandwich, whatever it is, because margins on fuel right now are low,” Lenard said.
Lenard says higher gas prices can leave consumers with less money to spend inside stores, affecting a major source of revenue for station owners.
“Because they’re facing tighter margins, consumers don’t have enough money to spend on snacks, drinks, and meals because they’re spending more on gas,” Lenard said.
A similar gas tax suspension in 2022 cost the state about $1.7 billion in revenue while saving drivers roughly the same amount at the pump. That suspension was extended multiple times and remained in place longer than this year’s order.
WSB Radio’s Jonathan O’Brien contributed to this story.
